ミマキエンジニアリング（6638） – [Delayed]Consolidated Financial Results for the Year Ended March 31, 2022 (Under Japanese GAAP)

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. May 12, 2022 Consolidated Financial Results for the Year Ended March 31, 2022 (Under Japanese GAAP) Tokyo 6638 https://ir-eng.mimaki.com/ Kazuaki Ikeda, President Koji Shimizu, Director and General Manager of Corporate Planning Division 0268 (80) 0058 Company name: MIMAKI ENGINEERING CO., LTD. Listing: Securities Code: URL: Representative: Inquiries: TEL: 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: Holding of financial results meeting: June 24, 2022 June 27, 2022 June 27, 2022 Yes Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the year ended March 2022 (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 Millions of yen % Millions of yen % Millions of yen % Millions of yen % Year ended March 31, 2022 Year ended March 31, 2021 59,511 22.1 2,569 2,688 633.7 2,347 48,722 (12.3) (509) 366 (61.3) (301) – – Note: Comprehensive income Year ended March 31, 2022 Year ended March 31, 2021 ¥3,574 million ¥172 million (-%) (-%) Basic earnings per share Diluted earnings per share Return on equity Ratio of ordinary profit to total assets Ratio of operating profit to net sales Year ended March 31, 2022 Year ended March 31, 2021 Yen 80.40 (10.21) Yen 80.31 – % 13.5 (1.9) % 4.8 0.7 Reference: Share of profit (loss) of entities accounted for using equity method Year ended March 31, 2022 Year ended March 31, 2021 ¥(12) million ¥23 million – – % 4.3 (1.0) Note: The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations have been applied from the beginning of the fiscal year under review, and the figures for the year ended March 31, 2022 are after the application of the said accounting standards. (2) Consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 60,857 50,838 18,716 16,213 % 30.6 31.8 Yen 647.55 548.10 As of March 31, 2022 As of March 31, 2021 Reference: Equity As of March 31, 2022 As of March 31, 2021 ¥18,633 million ¥16,165 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 Millions of yen Millions of yen Millions of yen Millions of yen (5,129) 6,634 (2,711) 15 4,275 (7,315) 7,501 10,683 Year ended March 31, 2022 Year ended March 31, 2021 2. Cash dividends Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) 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 Millions of yen Yen 0.00 7.50 7.50 – – – Yen 7.50 7.50 7.50 15.00 7.50 15.00 – – – 221 437 % – 18.7 30.4 % 1.4 2.5 3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) (% Display is the year-on-year rate of increase/decrease for the full year and the year-on-year rate for the quarter) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Second quarter (cumulative) Full year 30,700 6.6 770 (54.5) 700 (58.9) 430 (72.5) 65,600 10.2 2,330 (9.3) 2,180 (18.9) 1,440 (38.7) 14.73 49.32 * Notes (1) Changes in significant subsidiaries during the year ended March 31, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation): No (2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: Yes Changes in accounting policies due to other reasons: No Changes in accounting estimates: No Restatement: No Note: For details, please refer to “3. Consolidated financial statements and significant notes thereto, (5) Notes on consolidated financial statements, (Changes in accounting policies)” on page 16 of the attached materials. (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 during the period Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 32,040,000 shares 32,040,000 shares 3,264,767 shares 2,545,767 shares 29,196,702 shares 29,494,233 shares Reference: Overview of individual business results 1. Individual results for the year ended March 2022 (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 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 43,634 33.4 1,669 32,701 (15.2) (657) – – 1,635 (353) – – 1,270 (860) – – Year ended March 31, 2022 Year ended March 31, 2021 Year ended March 31, 2022 Year ended March 31, 2021 Basic earnings per share Diluted earnings per share Yen Yen 43.50 (29.18) 43.45 – (2) Non-consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 52,287 45,174 15,542 15,338 % 29.7 33.9 Yen 538.98 518.91 As of March 31, 2022 As of March 31, 2021 Reference: Equity As of March 31, 2022 As of March 31, 2021 ¥15,509 million ¥15,304 million * Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters The forecasts and other forward-looking statements in this report are based on currently available information and certain assumptions determined as rational. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. In addition, actual business results may differ significantly due to various factors. Please refer to “1. Overview of operating results, etc., (4) Future Outlook” on pages 6 and 7 of the attached materials for the conditions that are the premise of the business forecast and precautions when using the business forecast. Table of contents of attached materials Index 1. Overview of operating results, etc. …………………………………………………………………………………………….. 2 (1) Overview of operating results for the fiscal year ……………………………………………………………………. 2 (2) Overview of financial position for the fiscal year …………………………………………………………………… 4 (3) Overview of cash flow for the current period …………………………………………………………………………. 5 (4) Future outlook …………………………………………………………………………………………………………………… 6 2. Basic concept regarding the selection of accounting standards ………………………………………………………. 7 3. Consolidated financial statements and significant notes thereto ……………………………………………………… 8 (1) Consolidated balance sheets ………………………………………………………………………………………………… 8 (2) Consolidated statements of income and consolidated statements of comprehensive income ………. 10 Consolidated statements of income …………………………………………………………………………………….. 10 Consolidated statements of comprehensive income ………………………………………………………………. 11 (3) Consolidated statements of changes in equity ………………………………………………………………………. 12 (4) Consolidated statements of cash flows ………………………………………………………………………………… 14 (5) Notes on consolidated financial statements ………………………………………………………………………….. 16 (Note on going concern assumption) …………………………………………………………………………………… 16 (Changes in accounting policies) ………………………………………………………………………………………… 16 (Additional information) …………………………………………………………………………………………………… 16 (Contingent debt) ……………………………………………………………………………………………………………… 17 (Segment information, etc.) ……………………………………………………………………………………………….. 18 (Per share information) ……………………………………………………………………………………………………… 19 (Significant events after reporting period)……………………………………………………………………………. 20 – 1 – 1. Overview of operating results, etc. (1) Overview of operating results for the fiscal year During the fiscal year under review (hereinafter referred to as “the current fiscal year”), although the number of people infected with a new mutant strain of the novel coronavirus rapidly increased in the latter half of the period, the world economy showed a remarkable movement toward the normalization of economic and social activities due to the progress of vaccination and the low rate of serious illness, mainly in developed countries such as North America and Europe, while at the same time the outlook became increasingly uncertain recently, after Russia invaded Ukraine. In addition, the severe situation continues due to the continued impact of the disruption of global logistics and the difficulty in procuring parts and raw materials. In Japan as well, there have been signs of economic recovery in response to the gradual recovery trend of the world economy, but the pace has been heavy and the situation remains unpredictable. In this environment, the Group has continued to launch new products and expand sales, develop its business in anticipation of rapid changes in the market environment and customer needs, and build a foundation to improve profitability, based on the priority measures set forth in the “Mimaki V10” mid- to long-term growth strategy established in December 2020. In the fourth quarter of the fiscal year, the JV/CJV/TS330 series of flagship models for the SG (Sign Graphics) and TA (textile apparel) markets and the Cutting Plotter CG-AR Series will be newly introduced to the market. We continued to actively develop sales activities, such as developing channels and improving the quality of the Mini Exhibition Strategy that we have been promoting in addition to the number of implementations. Sales in the current fiscal year were affected by product supply shortages due to component and raw material shortages and extended lead times due to logistics disruptions, but sales in the SG, IP, and TA markets were significantly higher than in the fiscal year ended March 31, 2021 (“the previous fiscal year”) due to a recovery in printing demand and resumption of capital investment by customers in line with economic recovery in various regions of the world, particularly in North America and Europe. Existing mainstay products have seen significant growth in sales volume, especially in the SG and IP markets, and in addition to entry-level models such as the JV/UJV100-160 for the SG market and the TS100-1600 for the TA market, new products for the IP (Industrial Products) market such as the UJF-3042/6042MkIIe, UJF-7151plusII, and JFX600-2513, which began full-scale supply during the period under review, are also seeing strong growth in sales volume. In addition, sales of ink and maintenance parts increased significantly as customer demand for printing increased. By region, the depreciation of the yen also contributed to the year-on-year increase in all regions. On the other hand, during the fourth quarter of the current consolidated period, we were affected by the aforementioned Russian-Ukraine problem and the spread of the new corona infection in China. Compared to the same period two years ago, sales in Japan and Latin America decreased, while sales in North America, Europe, Asia, and Oceania increased significantly, so the company-wide sales exceeded the pre-corona level. In terms of profit, although cost of sales was affected by soaring transportation costs throughout the period and the impact of soaring prices of parts and raw materials became apparent from the latter half of the first quarter, the cost of sales ratio improved compared to the previous period, when expenses associated with structural reforms were recorded. SG&A expenses increased due to personnel costs associated with the cancellation of planned holidays implemented in the previous fiscal year, product repair costs associated with higher product utilization rates, new product launches, and quality issues at customers, and R&D costs for new product development in line with the “Mimaki V10” strategy. Although there was an increase in these expenses, in addition to the effect of increasing sales, the effect of yen depreciation of foreign exchange also contributed to a significant increase in Operating profit. During the current fiscal year, the Group posted net sales of ¥59,511 million (up 22.1% year on year), operating profit of ¥2,569 million (operating loss of ¥509 million in the previous fiscal year), ordinary profit of ¥2,688 million (up 633.7% year on year), and profit attributable to shareholders of the parent company of ¥2,347 million (loss of ¥301 million in the previous fiscal year). The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations has been applied from the beginning of the current fiscal year, and net sales increased by ¥182 million, operating profit decreased by ¥98 million, and ordinary profit and profit before income taxes and minority interests increased by ¥5 million, respectively, for the current fiscal year. In addition, the opening balance of retained earnings decreased by ¥5 million. For details, please – 2 – refer to “3. Consolidated financial statements and significant notes thereto (5) Notes on consolidated financial statements (Changes in accounting policies).” In addition, the major exchange rates for the current fiscal year were 1 US$ = ¥112.38 (¥106.06 in the previous fiscal year) and 1 EUR = ¥130.56 (¥123.70 in the previous fiscal year). The segment performance is as follows. (Japan/Asia/Oceania) Net sales were ¥27,266 million (up 12.9% year on year), and due to the application of Accounting Standard for Revenue Recognition, net sales increased by ¥193 million. Compared to the previous fiscal year, sales increased significantly in almost all countries and regions, mainly in Japan, Australia, Thailand and Indonesia, except for China and Taiwan. (North/Latin America) Net sales were ¥14,262 million (up 35.9% year on year), and due to the application of Accounting Standard for Revenue Recognition, net sales decreased by ¥27 million. In North America, sales of main units, inks, and maintenance parts increased due to capital investment by customers and recovery of operations. In Latin America, sales increased mainly in Brazil and Mexico. In addition to this, foreign exchange such as the US dollar and the Brazilian real had the effect of depreciating the yen from the previous fiscal year. As a result of the above, sales in this segment increased significantly. (Europe/Middle East/Africa) Net sales were ¥17,982 million (up 27.7% year on year), and net sales increased by ¥16 million due to the application of Accounting Standard for Revenue Recognition. Due to the recovery of capital investment and the increase in printing demand, sales of main units, inks, and maintenance parts increased, resulting in a significant increase in sales. In addition, the yen’s depreciation from the previous fiscal year also contributed to the increase in sales. The details of Net sales by market are as follows. Net sales (Thousands of yen) Component ratio (%) Year-on-year changes (%) 24,704,198 16,235,786 5,509,173 4,465,938 8,596,860 59,511,957 41.5 27.3 9.3 7.5 14.4 100.0 22.8 28.2 24.4 21.9 9.6 22.1 For SG market For the IP market For TA market FA business Other Total (For SG market) Net sales were ¥24,704 million (up 22.8% from the previous fiscal year). In the current fiscal year, the recovery of signage print demand due to the activation of economic activity became remarkable, and in addition, new demand for virus infection prevention related signage etc. also increased, and with the increase in capital investment, the main product CJV/UCJV300 in addition to the entry model sales of main units such as CJV150 and UJV55 were strong, and sales of ink also increased steadily, resulting in a significant increase in sales. (For IP market) Net sales were ¥16,235 million (up 28.2% year on year). The substantial increase in demand for printing industrial products, novelty goods, and other products in conjunction with the global economic recovery led to strong sales of the existing flagship product JFX200EX with its extensive product lineup and new products introduced in the current fiscal year, both in terms of the printer unit and ink, resulting in a substantial increase in sales. – 3 – (For TA market) Net sales were ¥5,509 million (up 24.4% year on year). In the current fiscal year, demand in the textile and apparel market grew along with the economic recovery, and sales of main units centered on entry-level models and ink due to an increase in occupancy rates increased in response to the recovery in capital investment by customers, resulting in a significant increase in sales. Net sales were ¥4,465 million (up 21.9% year on year). Due to the increase in demand accompanying the economic recovery, the FA equipment business, the basic inspection equipment business, and the metal processing business performed well, resulting in a significant increase in sales. The details of Net sales by item are as follows. Net sales (Thousands of yen) Component ratio (%) Year-on-year changes (%) 25,390,006 21,040,515 5,009,254 8,072,180 59,511,957 42.7 35.4 8.4 13.6 100.0 29.6 19.9 30.6 4.0 22.1 (FA business) Product body Ink Maintenance parts Other Total (Assets) (2) Overview of financial position for the fiscal year The balance of assets for the period was ¥60,857 million (¥50,838 million at the end of the previous fiscal year), an increase of ¥10,018 million. The balance of current assets was ¥47,495 million (¥39,163 million at the end of the previous fiscal year), an increase of ¥8,331 million. This was mainly due to an increase in raw materials and supplies, merchandise and finished goods under the policy to procure and retain parts, etc. for the purpose of supplying products to the market without being affected by global shortage of parts and raw materials and prolonged transportation lead time, and to maximize sales opportunities by precisely responding to increased demand associated with economic recovery. Non-current assets were ¥13,362 million (¥11,675 million at the end of the previous fiscal year), an increase of ¥1,686 million. This was mainly due to an increase of ¥523 million in deferred tax assets. The balance of liabilities for the period was ¥42,140 million (¥34,625 million at the end of the previous fiscal year), an increase of ¥7,514 million. The balance of current liabilities was ¥32,329 million (¥24,969 million at the end of the previous fiscal year), an increase of ¥7,360 million. This was mainly due to an increase in short-term borrowings of ¥6,497 million. The balance of non-current liabilities was ¥9,810 million (¥9,656 million at the end of the previous fiscal year), an increase of ¥154 million. This was due to an increase in lease liabilities of ¥569 million, etc., despite a decrease in long-term borrowings of ¥481 million, etc. (Liabilities) (Net assets) The balance of net assets for the period was ¥18,716 million (¥16,213 million at the end of the previous fiscal year), an increase of ¥2,503 million. This was due to an increase in retained earnings of ¥1,899 million and an increase in foreign currency translation adjustment of ¥1,214 million, etc. – 4 – (3) Overview of cash flow for the current period The balance of cash and cash equivalents (hereinafter referred to as “cash”) in the current fiscal year amounted to ¥7,501 million, a decrease of ¥3,182 million compared to the end of the previous fiscal year mainly due to an increase in inventories and an increase in trade receivables although there was an increase in short-term borrowings and long-term borrowings. The details of operating activities, investing activities, and financing activities are as follows. (Cash flows from operating activities) As a result of operating activities, the amount of cash used was ¥5,129 million (compared with cash provided of ¥6,634 million in the previous fiscal year). This was mainly due to the fact that although there was profit before income taxes of ¥2,778 million, there was an increase in inventories of ¥7,298 million. (Cash flows from investing activities) As a result of investing activities, the amount of cash used was ¥2,711 million (compared with cash provided of ¥15 million in the previous fiscal year). This was mainly due to payments into time deposits of ¥1,330 million and purchase of property, plant and equipment of ¥1,216 million. (Cash flows from financing activities) As a result of financing activities, the amount of cash provided was ¥4,275 million (compared with cash used of ¥7,315 million in the previous fiscal year). This was mainly due to the fact that although there were repayments of long-term borrowings of ¥4,366 million, there was an increase in short-term borrowings of ¥6,307 million and proceeds from long-term borrowings of ¥3,612 million. The cash flow indicators of the Group are as follows. Year ended March 31, 2018 Year ended March 31, 2019 Year ended March 31, 2020 Year ended March 31, 2021 Year ended March 31, 2022 Equity-to-asset ratio (%) Market value-based Equity-to-asset ratio (%) Cash flow to interest-bearing debt ratio (year) Interest coverage ratio (double) 32.5 44.0 6.6 16.9 32.2 32.8 22.2 6.0 29.2 22.6 29.7 3.2 31.8 36.4 2.6 39.1 30.6 32.9 – – Equity-to-asset ratio: Equity/Total assets Market Equity-to-asset ratio: Market capitalization/Total assets Cash flow to interest-bearing debt ratio: Interest-bearing debt/Operating cash flow Interest coverage ratio: Operating cash flow/Interest payment Notes: 1. Both are calculated based on consolidated financial figures. 2. Market capitalization is calculated by multiplying the closing price of the closing price at the end of the period by the Number of issued shares at the end of the period at the end of the period (after deducting treasury stock). 3. Operating cash flows use cash flows from the Consolidated statement of cash flows of cash flows. Interest-bearing liabilities cover all liabilities recorded on the Consolidated balance sheet that are paying interest. 4. Cash flow to interest-bearing debt and interest coverage ratio are not provided for the year ended March 31, 2022 since operating cash flow was negative. – 5 – (4) Future outlook Net sales Operating profit Ordinary profit Profit Six months ending September 30, 2022 Full year Amount (Millions of yen) Increase/decrease rate from the same period of the previous year (%) Amount (Millions of yen) Increase/decrease rate in the previous term (%) 30,700 770 700 430 6.6 (54.5) (58.9) (72.5) 65,600 2,330 2,180 1,440 10.2 (9.3) (18.9) (38.7) * The above forecasts have been prepared based on the information available as of the date of publication of this material, and actual results may vary due to various factors. For the consolidated earnings forecast for the fiscal year ending March 31, 2023, we forecast net sales of ¥65,600 million (up 10.2% year on year), operating profit of ¥2,330 million (down 9.3% year on year), ordinary profit of ¥2,180 million (down 18.9% year on year), and profit attributable to owners of parent of ¥1,440 million (down 38.7% year on year). Looking ahead at the outlook for conditions overall, in addition to the effects of COVID-19, we foresee uncertainties to remain regarding the global economic future that have been brought about by the Russia-Ukraine crisis, and we also expect to see a continuation of the effects of global shortages in parts and materials and disruptions in the supply chain for the first half of the fiscal year. At the same time, however, we expect the moderate recovery being experienced by the economy overall to continue. These make up the underlying assumptions in our forecast. In facing these conditions, the Company will follow its medium- to long-term growth strategy “Mimaki V10,” and not only pursue net sales growth but also undertake efforts to construct a corporate foundation capable of continually generating high levels of revenue. At the same time, we are conscious of the need to make appropriate responses to the numerous risks emerging from the precipitous changes in the environment as mentioned above. In the fiscal year ending March 31, 2023, while sticking to our policy of achieving an operating margin of 10% by 2025 as set forth in Mimaki V10, we will give necessary consideration to the business environment we are operating in and take priority measures to respond to business risks while striving to build the foundations necessary to realize our target. We describe our Group’s management policy for the fiscal year ending March 31, 2023 as “Securing Fundamentals,” and we will take on these efforts utilizing the combined capabilities of the entire Group. For net sales, although we will have to deal with the effects from shortages in parts and raw materials and disruptions in the supply chain, we are expending to achieve considerable increases in revenue in each market, SG, IP, TA, and FA, through launching new products targeting the opportunities of demand recovery in each sales market while growing sales of existing products that were launched in the fiscal years up until now. Looking at each region, for Europe sales projections are difficult due to the Russia-Ukraine crisis, but while we will have to absorb a certain degree of impact from the eastern European countries, we are expecting revenues to be slightly higher year on year. However, for Asia and Oceania, North America, Japan, and Latin America, we are expecting to achieve considerably increases in revenue. Breaking down profit, in operating profit, an expectation of increase arises from the increased revenue. That said, however, after factoring in deterioration in the cost of sales ratio that will occur due to the rising costs associated with the tough suppliers’ market for securing parts and raw materials and for transportation, and also taking into account the additional selling, general and administrative expenses accompanying the return to full-fledged sales activities and accelerated product development, etc., and also due to the fact that the exchange rate assumption was set at a level of yen appreciation compared to the previous year, we expect operating profit to actually decrease. Regarding ordinary profit, in addition to the factor of a decrease in operating profit, compared to the year ended March 31, 2022, which had foreign exchange gains, we expect the level of decrease in ordinary profit will surpass that of operating profit. For profit attributable to owners of parent, because the effective statutory tax rate, – 6 – which had been at a low level due to the increased in the amount recorded for deferred tax assets for internal profit eliminations between group companies in the fiscal year ended March 31, 2022, is expected to return to normal levels in the fiscal year ending March 31, 2023, the level of profit decrease is expected to surpass that of ordinary profit. The main exchange rates are 1 US$: ¥110, and 1 EUR: ¥130. 2. Basic concept regarding the selection of accounting standards The Group uses Japanese standards for accounting, but we recognize that there are no particular issues at this time. However, future growth will be centered on capturing overseas markets, and the role of overseas subsidiaries is expected to become even more important. Therefore, we are considering the application of IFRS, which would facilitate unified accounting treatment throughout the group. – 7 – 3. Consolidated financial statements and significant notes thereto (1) Consolidated balance sheets As of March 31, 2021 As of March 31, 2022 (Thousands of yen) 8,971,526 – 738,621 8,474,314 14,627,845 2,828,991 8,375,320 3,526,946 (48,529) 47,495,036 9,039,235 (5,416,377) 3,622,857 2,225,807 (1,537,452) 688,354 8,566,132 (7,041,023) 1,525,109 3,296,059 2,371,483 (1,454,359) 917,123 127,974 10,177,477 220,890 366,998 587,888 146,926 32,521 1,523,093 1,845,630 (951,295) 2,596,876 13,362,243 60,857,279 10,839,746 7,746,264 – – 11,080,748 1,871,152 4,967,614 2,846,437 (188,887) 39,163,076 8,641,461 (4,970,522) 3,670,939 1,967,046 (1,345,253) 621,793 7,996,457 (6,797,052) 1,199,405 3,275,034 1,886,324 (1,455,533) 430,790 90,771 9,288,734 82,453 409,249 491,702 131,334 32,521 999,448 1,342,568 (610,502) 1,895,369 11,675,806 50,838,883 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 Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Land Leased assets Accumulated depreciation Leased assets, net Construction in progress Total property, plant and equipment Intangible assets Goodwill Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets – 8 – Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Current portion of long-term borrowings Lease liabilities Accounts payable – other Income taxes payable 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 Lease liabilities Deferred tax liabilities Retirement benefit liability Asset retirement obligations Provision for retirement benefits for directors (and other officers) 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 Share acquisition rights Non-controlling interests Total net assets Total liabilities and net assets (Thousands of yen)As of March 31, 2021 As of March 31, 2022 4,322,168 5,449,924 4,125,700 3,993,954 197,432 1,274,402 257,644 884,655 – 1,049,122 3,414,047 24,969,051 8,913,749 249,070 56,941 383,029 52,940 – 650 9,656,381 34,625,433 4,357,456 4,617,040 9,979,574 (1,329,614) 17,624,456 5,478 (1,568,988) 104,767 (1,458,742) 34,250 13,486 16,213,450 50,838,883 3,571,634 5,917,210 10,623,315 3,813,036 179,591 1,348,025 650,980 904,279 41,184 1,512,195 3,768,330 32,329,783 8,432,453 818,221 69,590 384,090 59,631 45,900 650 9,810,537 42,140,321 4,357,456 4,617,426 11,878,738 (1,951,816) 18,901,804 8,760 (354,857) 77,803 (268,293) 33,595 49,850 18,716,957 60,857,279 – 9 – (2) Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Thousands of yen) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit (loss) Non-operating income Interest income Dividend income Insurance claim income Rent income ICMS Refund Foreign exchange gains Subsidy income Gain on business transfer Share of profit of entities accounted for using equity method Gain on sale of scraps Other Total non-operating income Non-operating expenses Interest expenses Sales discounts Foreign exchange losses Share of loss of entities accounted for using equity method Consumption tax difference Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Other Total extraordinary income Extraordinary losses Loss on sale of non-current assets Impairment losses Loss on disposal of non-current assets Total extraordinary losses Profit (loss) before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit (loss) Profit (loss) attributable to non-controlling interests Profit (loss) attributable to owners of parent – 10 – 48,722,930 30,108,369 18,614,560 19,124,372 (509,812) 16,163 876 3,664 15,801 7,525 – 889,959 121,091 23,612 11,483 62,350 1,152,528 167,754 81,922 8,448 – 11,752 6,457 276,335 366,381 55,492 1,190 56,682 4,844 642,456 47,563 694,864 (271,801) 324,330 (155,309) 169,021 (440,822) (139,571) (301,251) 59,511,957 35,665,993 23,845,963 21,276,696 2,569,267 18,627 930 8,708 13,266 11,582 103,353 61,295 – – 36,576 38,390 292,730 132,925 – – 12,140 20,630 8,003 173,700 2,688,298 92,415 2,169 94,584 4,417 – – 4,417 2,778,465 913,621 (501,412) 412,208 2,366,256 18,777 2,347,478 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Consolidated statements of comprehensive income Profit (loss) 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 (Thousands of yen) 2,366,256 3,282 1,235,262 (26,963) (3,544) 1,208,036 3,574,292 3,537,928 36,364 (440,822) 10,959 542,983 62,783 (3,146) 613,580 172,757 306,151 (133,393) – 11 – (Thousands of yen)Total shareholders’ equity (301,251) – Balance at beginning of period 4,357,456 4,617,040 10,280,826 (1,329,614) 17,925,708 Share capital Capital surplus Retained earnings Treasury shares (3) Consolidated statements of changes in equity Fiscal year ended March 31, 2021 Changes during period Loss attributable to owners of parent Net changes in items other than shareholders’ equity Total changes during period – – (301,251) – (301,251) Balance at end of period 4,357,456 4,617,040 9,979,574 (1,329,614) 17,624,456 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasure-ments of defined benefit plans Total accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets Balance at beginning of period (5,481) (2,102,648) 41,984 (2,066,145) 26,892 146,880 16,033,335 Changes during period Loss attributable to owners of parent Net changes in items other than shareholders’ equity (301,251) 10,959 533,660 62,783 607,402 7,357 (133,393) 481,366 Total changes during period 10,959 533,660 62,783 607,402 7,357 (133,393) 180,114 Balance at end of period 5,478 (1,568,988) 104,767 (1,458,742) 34,250 13,486 16,213,450 Shareholders’ equity (301,251) – 12 – (Thousands of yen)Total shareholders’ equity (442,413) 2,347,478 984 – (5,901) (442,413) 2,347,478 (622,800) 984 Fiscal year ended March 31, 2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity Balance at beginning of period 4,357,456 4,617,040 9,979,574 (1,329,614) 17,624,456 (5,901) (5,901) Restated balance 4,357,456 4,617,040 9,973,673 (1,329,614) 17,618,555 (442,413) 2,347,478 (622,800) (622,800) 386 597 Total changes during period – 386 1,905,065 (622,202) 1,283,249 Balance at end of period 4,357,456 4,617,426 11,878,738 (1,951,816) 18,901,804 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasure-ments of defined benefit plans Total accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets Balance at beginning of period 5,478 (1,568,988) 104,767 (1,458,742) 34,250 13,486 16,213,450 Restated balance 5,478 (1,568,988) 104,767 (1,458,742) 34,250 13,486 16,207,548 Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Exercise of share acquisition rights Net changes in items other than shareholders’ equity Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Exercise of share acquisition rights Net changes in items other than shareholders’ equity – 13 – 3,282 1,214,130 (26,963) 1,190,449 (654) 36,364 1,226,159 Total changes during period 3,282 1,214,130 (26,963) 1,190,449 (654) 36,364 2,509,408 Balance at end of period 8,760 (354,857) 77,803 (268,293) 33,595 49,850 18,716,957 (Thousands of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (271,801) 1,577,890 642,456 111,993 259,958 140,077 – 180,592 22,757 (17,039) (3,664) 167,754 (889,959) (121,091) (23,612) (173,259) (50,647) 2,062,120 246,564 2,295,562 (321,106) 189,891 (22,434) 6,003,003 25,115 3,664 (169,605) 886,025 (288,975) 174,928 6,634,156 (7,103) – (434,247) 99,151 (18,713) (54,535) – 334,090 97,303 15,944 2,778,465 1,685,171 – 34,509 100,598 (16,973) 41,184 445,696 (37,563) (19,557) (8,708) 132,925 (61,295) – 12,140 (284,963) (87,997) (1,367,761) (7,298,695) (392,030) (239,491) 26,693 260,807 (4,296,845) 22,119 8,708 (132,892) 45,178 (866,225) 90,824 (5,129,131) (1,330,000) 22,968 (1,216,101) 127,084 (341,602) (491) (243,401) – 269,649 (2,711,895) (4) Consolidated statements of cash flows Cash flows from operating activities Profit (loss) before income taxes Depreciation Impairment losses Amortization of goodwill Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for bonuses for directors (and other officers) Increase (decrease) in provision for product warranties Increase (decrease) in retirement benefit liability Interest and dividend income Insurance claim income Interest expenses Subsidy income Gain on business transfer Share of loss (profit) of entities accounted for using equity method Foreign exchange losses (gains) Loss (gain) on sales of fixed assets Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Decrease (increase) in consumption taxes refund receivable Increase (decrease) in accounts payable – other Other, net Subtotal Interest and dividends received Proceeds from insurance income Interest paid Subsidies received Income taxes paid Income taxes refund 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 Purchase of shares of subsidiaries resulting in change in scope of consolidation Proceeds from sale of businesses Other, net Net cash provided by (used in) investing activities – 14 – Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Purchase of treasury shares Proceeds from exercise of employee share options Repayments of lease liabilities Dividends paid 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 (6,721,626) 5,541,200 (5,998,353) – – (135,215) (1,665) (7,315,659) 360,271 (305,287) 10,988,848 10,683,560 (Thousands of yen)6,307,435 3,612,000 (4,366,268) (622,800) 815 (214,910) (441,159) 4,275,112 383,851 (3,182,062) 10,683,560 7,501,498 – 15 – (5) Notes on consolidated financial statements (Note on going concern assumption) Not applicable. (Changes in accounting policies) (Application of Accounting standards on revenue recognition) The Company has applied the “Accounting Standard for Revenue Recognition” (Accounting Standard No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the fiscal year under review, and it has recognized revenue at the time the control of promised goods or services is transferred to the customer at the amount expected to be received upon exchange of said goods or services. As a result, the Company previously recognized revenue at the time of shipment for products that the Group was obligated to install in contracts with customers. However, after reviewing the identification of performance obligations and the timing of satisfaction of such obligations in accordance with revenue recognition accounting standards, the Company has determined that the customer obtains control over the products and the Group satisfies its performance obligations when the installation of the products is completed. For this reason, for products for which the Group is obliged to install in the contract with the customer, revenue is recognized when the product installation is completed. In addition, sales discounts that were previously recorded as non-operating expenses are deducted from Net sales. In accordance with the transitional treatment prescribed in the proviso of paragraph 84 of the Accounting Standard for Revenue Recognition, the cumulative effect of retrospective application of the new accounting policy prior to the beginning of the fiscal year under review is added to or deducted from retained earnings at the beginning of the fiscal year under review, and the new accounting policy is applied from such beginning balance. As a result, compared to the conventional method, net sales increased by ¥182,036 thousand, operating profit decreased by ¥98,908 thousand, and ordinary profit and profit before income taxes each increased by ¥5,572 thousand for the fiscal year under review. In addition, the balance of retained earnings at the beginning of the period decreased by ¥5,901 thousand. Due to the application of the Accounting Standard for Revenue Recognition, “Notes and accounts receivable – trade” under current assets of the consolidated balance sheet as of the end of the previous fiscal year has been included in “Notes receivable” and “Accounts receivable” under current assets from the consolidated balance sheet as of the end of the fiscal year under review. In accordance with the transitional treatment stipulated in paragraph 89-2 of the Accounting Standard for Revenue Recognition, the previous fiscal year has not been reclassified using the new presentation method. (Application of Accounting Standards for Calculation of Market Value) “Accounting Standards for Calculation of Market Value” (Accounting Standard No. 30, July 4, 2019. Hereinafter referred to as “market value calculation accounting standard.”), and so on are applied from the beginning of the fiscal year under review, and in accordance with the transitional treatment prescribed in paragraph 19 of the market value calculation accounting standard, and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (Accounting Standard No. 10, July 4, 2019), the new accounting policies prescribed by the accounting standards are to be applied in a prospective manner. There is no impact on the Consolidated financial statements. (Additional information) (Accounting estimate for the impact of the spread of the COVID-19) The Group makes accounting estimates such as impairment accounting for fixed assets and recoverability of deferred tax assets based on the information available at the time of preparation of Consolidated financial statements. Although the impact of the COVID-19 on the Group’s business varies depending on the business, the accounting estimate is made based on the assumption that the – 16 – impact will continue for a certain period of the fiscal year ending March 31, 2023. (Contingent debt) MIMAKI BRASIL COMERCIO E IMPORTACAO LTDA (hereinafter referred to as Mimaki Brazil), a consolidated subsidiary of the company, was investigated by the Brazilian tax authorities regarding the importation of our inkjet printers and received two additional tax notices totaling 84,920 thousand Brazilian reals (101,013 thousand Brazilian reals with interest for delay added). Mimaki Brazil disagrees with the findings of the authorities and has filed a tax case with the court in December 2019 with respect to the 44,494 thousand Brazilian reals (55,079 thousand Brazilian reals with added interest for the delay) for which it received a notice of additional taxation in September 2018. In addition, we filed a complaint with the tax authorities in December of the same year regarding the 40,425 thousand Brazilian reals (45,933 thousand Brazilian reals with late interest added) that received the additional tax notice in November 2018. Mimaki Brazil will take appropriate measures based on the idea that this additional taxation is groundless. Therefore, it is difficult to estimate the amount of impact on the Group’s business performance at this time. – 17 – (Segment information, etc.) [Segment information] 1. Description of reportable segments The Company’s reporting segments are components of the Company for which separate financial information is available and which are subject to periodic review by the Board of Directors for the purpose of evaluating the allocation of management resources and evaluating performance. The Company mainly produces and sells industrial inkjet printers and cutting plotters, with the Company in Japan and local subsidiaries in North America, Europe, Asia/Oceania, and Latin America. Each local subsidiary is an independent management unit, formulating comprehensive strategies for each region for the products it handles, and developing business activities. 2. How to calculate the amount of Net sales, profit or loss, assets, liabilities and other items for each reporting segment The method of accounting for the reported segments is in line with the company policy adopted to prepare the Consolidated financial statements. Segment profit is based on Operating profit. Internal rates and transfers between segments are based on prevailing market prices. 3. Information on Net sales and profit or loss amount by reporting segment and revenue decomposition information Previous fiscal year (from April 1, 2020 to March 31, 2021) Japan/Asia/Oceania North/Latin America Total Europe/Middle East/Africa Net sales (Thousands of yen) Revenues from external customers Internal Net sales or transfers between segments Total Segment loss (loss) 24,140,925 10,497,439 14,084,565 48,722,930 16,908,595 41,049,520 (491,694) 13,564 1,713,488 18,635,647 10,511,003 (216,079) 15,798,053 (250,126) 67,358,577 (957,899) – 18 – Current fiscal year (from April 1, 2021 to March 31, 2022) Japan/Asia/Oceania North/Latin America Total Europe/Middle East/Africa Net sales (Thousands of yen) Revenue from contracts with customers other revenue Revenues from external customers Internal Net sales or transfers between segments Total Segment profit 27,266,783 14,262,558 17,982,615 59,511,957 – – – – 27,266,783 14,262,558 17,982,615 59,511,957 24,623,501 51,890,285 2,155,986 19,129 3,463,188 28,105,819 14,281,687 441,390 21,445,803 320,641 87,617,777 2,918,017 4. Difference between the total amount of reported segments and the amount recorded in the Consolidated financial statements and the main contents of the difference (matters related to difference adjustment) Profit Previous fiscal year Current fiscal year (957,899) 448,087 (509,812) (Thousands of yen) 2,918,017 (348,749) 2,569,267 Reportable segment total Clearing transactions between segments Operating profit (loss) in consolidated financial statements 5. Disclosure of changes, etc. in reportable segments As described in “Changes in accounting policies,” the Company has applied the Accounting Standard for Revenue Recognition and so forth from the beginning of the fiscal year under review, and has changed its accounting method for revenue recognition, and has therefore changed the measurement method of profit or loss for business segments in the same manner. As a result of this change, segment sales in the “Japan/Asia/Oceania” segment increased by ¥193,439 thousand, and decreased by ¥27,643 thousand in the “North/Latin America” segment, and increased by ¥16,241 thousand in the “Europe/Middle East/Africa,” in the fiscal year under review compared with the previous method. Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Per share information) Net assets per share Basic earnings (loss) per share Diluted earnings per share (Yen) 647.55 80.40 80.31 Notes: 1. Diluted earnings per share for the previous fiscal year is not stated because there are no diluting potential shares and there is a net loss per share. 2. The basis for calculation of basic earnings (loss) per share and diluted earnings per share is as follows. 548.10 (10.21) – – 19 – Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Basic earnings (loss) per share Profit (loss) attributable to owners of parent (Thousands of yen) Amount not attributable to ordinary shareholders (Thousands of yen) Profit (loss) attributable to common stockholders of the parent company (Thousands of yen) Average number of shares of Ordinary share/s Average number of shares outstanding during the period (shares) Diluted earnings per share Profit adjustment amount attributable to Owners of the parent (Thousands of yen) Increase in Ordinary share/s (shares) [Of which, share acquisition rights (shares)] (301,251) – (301,251) – – [–] 29,494,233 29,196,702 Summary of potential shares that were not included in the calculation of Diluted earnings per share because they do not have a diluting effect. June 27, 2017 Ordinary General Meeting of Shareholders Resolution Share options (share acquisition rights) June 27, 2017 Ordinary General Meeting of Shareholders Resolution Share options (share acquisition rights) 71,000 shares of Ordinary share/s 66,500 shares of Ordinary share/s 2,347,478 – 2,347,478 – 35,077 [35,077] June 28, 2018 Ordinary General Meeting of Shareholders Resolution Share options (share acquisition rights) 88,700 shares of Ordinary share/s June 27, 2019 Ordinary General Meeting of Shareholders Resolution Share options (share acquisition rights) 101,400 shares of Ordinary share/s (Significant events after reporting period) (Acquisition of non-current assets) In line with the Group’s medium- to long-term strategy “Mimaki V10,” the Company entered into an agreement with Mie Fuji Co., Ltd. on April 18, 2022 regarding the acquisition of the non-current assets described below for the purpose of increasing production capacity and strengthening development potential to place the Group in a better position to achieve business expansion. Name of property MIMAKI ENGINEERING CO., LTD. Maruko Factory Location Land area Building area 2535 Mitakedo Ueda-shi, Nagano 18,207 m2 8,175 m2 (Floor area of factory buildings, welfare facilities, warehouse facilities, etc.) Planned date to start operation Partial start of operation is scheduled from June 2022. As a result, the Group will solve the issue regarding production space shortage for the inkjet printer units for industrial use in the Head Office, Kazawa Factory (Tomi-shi, Nagano) and increase production capability for various purposes from entry-level models to high-end models, while allowing for reorganization of the layout inside Kazawa Factory in order to increase development potential by – 20 – expanding the allocated space for development activities. Note that including the acquisition of these non-current assets, the total investment for the fiscal year ending March 31, 2023 for the Maruko Factory overall is provisionally set to approximately ¥1,085 million. The impact on the financial results for the fiscal year ending March 31, 2023 from this investment has been factored into the forecast for the consolidated financial results herein announced. – 21 –