アビスト（6087） – [Delayed]Consolidated Financial Results for the First Six Months of the Fiscal Year Ending September 30, 2022

Translation May 11, 2022 Consolidated Financial Results for the First Six Months of the Fiscal Year Ending September 30, 2022 Tokyo Stock Exchange https://www.abist.co.jp Phone: +81-422-26-5960 ABIST Co., Ltd. 6087 Katsuhiro Shin, President Akira Shin, Representative Managing Director Company name: Stock code: Representative: Inquiries: Scheduled date to submit Quarterly Securities Report: Scheduled date to commence dividend payments: Preparation of supplementary material on quarterly financial results: Yes Holding of quarterly financial results presentation meeting: Listing: URL: May 11, 2022 – Yes (for analysts and institutional investors) 1. Consolidated Performance for the First Six Months of the Fiscal Year Ending September 30, 2022 (from October 1, 2021 to March 31, 2022) (1) Consolidated operating results (cumulative) Net sales Operating profit Ordinary profit First six months ended March 31, 2022 March 31, 2021 Note: Comprehensive income Million yen 4,671 4,516 % 3.4 (3.7) Million yen 372 302 For the first six months ended March 31, 2022: For the first six months ended March 31, 2021: % 23.2 (42.4) Million yen 444 383 Basic earnings per share Diluted earnings per share First six months ended March 31, 2022 March 31, 2021 (2) Consolidated financial position Yen 40.42 61.68 Yen – – (Rounded down to the nearest million yen) (Percentages indicate year-on-year changes.) Profit attributable to owners of parent Million yen 160 245 [–34.9%] [–30.9%] % (34.5) (26.2) % 16.0 (22.9) 171 million yen 263 million yen Total assets Net assets Equity ratio Million yen 8,336 8,410 Million yen 5,907 6,141 As of March 31, 2022: As of September 30, 2021: 5,907 million yen 6,141 million yen % 70.9 73.0 As of March 31, 2022 September 30, 2021 Reference: Equity 2. Cash Dividends Fiscal year ended September 30, 2021 Fiscal year ending September 30, 2022 Fiscal year ending September 30, 2022 (Forecast) Annual cash dividends per share First quarter-end Second quarter-end Third quarter-end Yen – Yen 0.00 0.00 Yen – – – Fiscal year-end Annual Yen 102.00 102.00 Yen 102.00 102.00 Note: Revisions to the forecasts of cash dividends most recently announced: None 3. Consolidated Earnings Forecasts for the Fiscal Year Ending September 30, 2022 (from October 1, 2021 to September 30, 2022) (Percentages indicate year-on-year changes.) Basic earnings per share Profit attributable to owners of parent Operating profit Ordinary profit Net sales Full year Million yen 9,670 % Million yen 710 7.2 % Million yen 800 61.6 % Million yen 410 29.5 % (38.8) Yen 103.02 Note: Revisions to the earnings forecasts most recently announced: Yes * Notes (1) Significant changes to subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of consolidation): None New: – Exclusion: – (2) Application of special accounting in preparing consolidated quarterly financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error corrections (a) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (b) Changes in accounting principles other than (a): (c) Changes in accounting estimates: (d) Restatement of prior period financial statements after error corrections: None None None (4) Number of issued shares (common shares) (a) Total number of issued shares at the end of the period (including treasury shares) 3,980,000 shares 3,980,000 shares As of March 31, 2022 As of September 30, 2021 (b) Number of treasury shares at the end of the period: As of March 31, 2022 As of September 30, 2021 First six months ended March 31, 2022 First six months ended March 31, 2021 377 shares 344 shares 3,979,642 shares 3,979,675 shares (c) Average number of outstanding shares during the period (cumulative from the beginning of the fiscal year) * Quarterly results are not subject to quarterly review by a certified public accountant or the auditing firm. * Cautionary statement regarding forecasts of operating results and special notes (Caution regarding forward-looking statements, etc.) Financial results forecasts and other forward-looking statements contained in this material are based on information available to the Company and certain assumptions that are deemed to be reasonable. Therefore, actual results may differ significantly from these forward-looking statements due to various factors. For more information about these assumptions and other conditions that form the basis of these forecasts, please see page 3 of the Attached Materials of the Consolidated Financial Results, “1. Qualitative Information for Financial Results for the First Six Months, (3) Explanation regarding consolidated earnings forecasts and other forward-looking statements.” Table of Contents of the Attached Materials 1. Qualitative Information for Financial Results for the First Six Months ……………………………………………………………………….. 2 (1) Explanation regarding operating results …………………………………………………………………………………………………………… 2 (2) Explanation regarding financial position ………………………………………………………………………………………………………….. 3 (3) Explanation regarding consolidated earnings forecasts and other forward-looking statements …………………………………. 3 2. Consolidated Financial Statements and Primary Notes ……………………………………………………………………………………………… 4 (1) Consolidated quarterly balance sheets ……………………………………………………………………………………………………………… 4 (2) Consolidated quarterly statements of income and consolidated quarterly statements of comprehensive income …………. 5 (3) Consolidated quarterly statement of cash flows …………………………………………………………………………………………………. 7 (4) Notes to consolidated financial statements ……………………………………………………………………………………………………….. 8 (Notes on going concern assumption) ……………………………………………………………………………………………………………… 8 (Notes in the case of material changes in shareholders’ equity) …………………………………………………………………………… 8 (Changes in accounting policies) ……………………………………………………………………………………………………………………. 8 (Matters concerning consolidated quarterly statements of income) ……………………………………………………………………… 8 (Segment information) ………………………………………………………………………………………………………………………………….. 9 (Matters concerning revenue recognition) ………………………………………………………………………………………………………. 10 – 1 – 1. Qualitative Information for Financial Results for the First Six Months (1) Explanation regarding operating results During the first six months of the fiscal year ending September 30, the global economy was affected by the prolonged COVID-19 pandemic, supply chain risks such as a global semiconductor shortage and rising prices of energy and raw materials, geopolitical risks that included the situation in Ukraine, as well as heightened concern over inflation. Uncertainty about the outlook for the world economy is likely to continue. Trends in the world economy continue to need to be monitored closely. The Japanese economy is expected to recover chiefly due to policy measures as economic and social activities normalize, supported by thorough infection control. However, there is uncertainty mainly due to the situation in Ukraine, and we need to pay careful attention to downside risks related to rising raw materials prices, changes in financial and capital markets, and supply restrictions, among other factors. We also need to closely monitor the effects of COVID-19 infections. In the automobile industry and auto parts industry, where the Abist Group operates its main business, there are production adjustments due to the tight supply of parts, including semiconductors, but the global trend towards decarbonization is continuing, and research and development are expected to accelerate to develop next-generation technologies. The Design and Development Outsourcing business, the main business of the Company, is in the upstream process in manufacturing, and the suspension of plant operations and production cuts at automakers are not likely to have significant direct effects, for instance in the form of contract cancellations, on the Group. Nevertheless, it will take time for effort hours to recover to the pre-pandemic level. Any prolongation or worsening of the COVID-19 pandemic could affect results at the Group. We thus need to continue to closely monitor trends in the auto and auto parts industries. In this business environment, the Company actively promoted business, focusing on expanding its core business, the Design and Development Outsourcing business. The Group consequently posted in the first six months under review consolidated net sales of 4,671 million yen (up 3.4 year on year), an operating profit of 372 million yen (up 23.2%), and an ordinary profit of 444 million yen (up 16.0%). Profit attributable to owners of parent came to 160 million yen (down 34.5% year on year), reflecting losses related to subsidiaries. The results in each segment are as follows. (a) Design and Development Outsourcing business engineer) utilization rate than planned. (b) 3D Printing business In this segment, net sales stood at 4,544 million yen (up 4.7% year on year), and segment profit (operating profit) came to 845 million yen (up 18.8%). The segment profit (operating profit) margin was 18.6%. The major contributing factors for the higher sales and profit were an increase in order volume primarily under contracts for work and a higher engineer (including young In this segment, the Group proactively made proposals, including those related to DfAM (design for 3D printing). Meanwhile, the Group reviewed fixed costs and other expenses. These initiatives resulted in an increase in net sales to 51 million yen (up 9.9% year on year), but the Group posted a segment loss (operating loss) of 6 million yen (as compared to a segment loss (operating loss) of 30 million yen in the same period of the previous fiscal year). (c) Beauty and Health Products Manufacture and Sale business In this segment, net sales were 46 million yen (down 43.1% year on year), and the segment loss (operating loss) was 66 million yen (as compared to a segment loss (operating loss) of 34 million yen in the same period of the previous fiscal year), reflecting the effect of a recall of some nonconforming OEM products (jelly drinks) and a decrease in sales of beauty products. (d) Real Estate Leasing business In this segment, net sales stood at 29 million yen (down 37.1% year on year), reflecting the effect of the sale of income- producing properties in the second quarter in the previous fiscal year. Segment profit (operating profit) came to 12 million yen (down 20.6%). The segment profit (operating profit) margin was 42.6%. – 2 – (2) Explanation regarding financial position Total assets at the end of the second quarter under review stood at 8,336 million yen, down 73 million yen from the end of the previous consolidated fiscal year. This is attributable mainly to a decrease in non-current assets resulting from impairment losses on machinery and equipment, etc. at subsidiaries, which more than offset an increase in cash and deposits resulting from operating activities. Total liabilities stood at 2,429 million yen, an increase of 160 million yen from the end of the previous consolidated fiscal year. This is chiefly due to increases in short-term borrowings and in other provisions. Net assets fell 234 million yen from the end of the previous consolidated fiscal year, to 5,907 million yen chiefly due to dividends (3) Explanation regarding consolidated earnings forecasts and other forward-looking statements The Company has revised the forecasts of consolidated financial results for the fiscal year ending September 30, 2022 from those announced on November 10, 2021. For details, see Notice of Differences Between Forecast and Actual Results for the First Half of the Fiscal Year Ending September 30, 2022 and Revision of Full Year Financial Results Forecast released separately on May paid. 11, 2022. – 3 – (Thousand yen) As of September 30, 2021 As of March 31, 2022 2. Consolidated Financial Statements and Primary Notes (1) Consolidated quarterly balance sheets Property, plant and equipment Buildings and structures, net Land Other, net Total property, plant and equipment Intangible assets Investments and other assets Total non-current assets Cash and deposits Accounts receivable – trade Work in process Raw materials and supplies Other Total current assets Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Short-term borrowings Accounts payable – other Income taxes payable Provision for bonuses Other provisions Other Total current liabilities Provision for retirement benefits for directors (and other officers) Retirement benefit liability Other Total non-current liabilities Total liabilities Net assets Accumulated other comprehensive income Total net assets Total liabilities and net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Remeasurements of defined benefit plans Total accumulated other comprehensive income – 4 – 3,590,970 1,334,259 46,776 41,247 175,140 5,188,393 1,077,359 1,044,527 141,642 2,263,529 258,231 700,183 3,221,944 8,410,338 50,000 631,117 216,520 363,086 – 182,913 1,443,637 246,320 509,758 68,957 825,036 2,268,673 1,026,650 1,016,650 4,142,169 (1,081) 6,184,387 (42,722) (42,722) 6,141,665 8,410,338 3,686,925 1,354,909 68,177 23,086 126,086 5,259,185 1,048,179 1,044,527 70,600 2,163,308 222,187 691,825 3,077,321 8,336,507 150,000 632,453 212,455 352,642 44,548 170,634 1,562,733 263,841 534,961 67,721 866,523 2,429,257 1,026,650 1,016,650 3,897,092 (1,176) 5,939,215 (31,966) (31,966) 5,907,249 8,336,507 (2) Consolidated quarterly statements of income and consolidated quarterly statements of comprehensive income (Thousand yen) First six months ended March 31, 2021 First six months ended March 31, 2022 Consolidated quarterly statements of income First six-month period Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Commission income Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Total non-operating expenses Ordinary profit Extraordinary losses Losses related to subsidiaries Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to owners of parent 4,516,904 3,453,605 1,063,298 760,816 302,482 334 80,211 145 80,691 111 111 383,062 – – 383,062 143,720 (6,122) 137,597 245,464 245,464 4,671,933 3,519,613 1,152,320 779,620 372,699 310 71,346 140 71,797 110 110 444,386 * 108,151 108,151 336,235 181,550 (6,162) 175,387 160,847 160,847 – 5 – Consolidated quarterly statements of comprehensive income First six-month period Profit Other comprehensive income Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Thousand yen) First six months ended March 31, 2021 First six months ended March 31, 2022 245,464 18,139 18,139 263,604 263,604 – 160,847 10,756 10,756 171,604 171,604 – – 6 – (3) Consolidated quarterly statement of cash flows Profit before income taxes Cash flows from operating activities Depreciation Increase (decrease) in provision for bonuses Increase (decrease) in retirement benefit liability Increase (decrease) in provision for retirement benefits for directors (and other officers) Interest and dividend income Interest expenses Subsidy income Increase (decrease) in accounts payable – other Increase (decrease) in accrued consumption taxes Losses related to subsidiaries Decrease (increase) in trade receivables Decrease (increase) in inventories Decrease (increase) in prepaid expenses Other Net cash provided by (used in) operating activities Cash flows from investing activities Subtotal Interest and dividends received Interest paid Income taxes paid Subsidies received Purchase of property, plant and equipment Purchase of intangible assets Payments of leasehold and guarantee deposits Proceeds from refund of leasehold and guarantee deposits Other Net cash provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Repayments of finance lease obligations Dividends paid Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Purchase of treasury shares (Thousand yen) First six months ended March 31, 2021 First six months ended March 31, 2022 383,062 90,641 9,313 48,034 (14,954) (17) 111 (80,211) – 29,482 (25,896) 14,106 (29,892) (183,437) 55,175 295,517 17 (97) (144,059) 80,211 231,590 (10,100) (22,458) (3,282) 1,895 77 (33,867) 100,000 (594) (152) (405,238) (305,984) (108,262) 3,017,873 2,909,611 336,235 88,670 (10,444) 40,706 17,521 (21) 110 (71,346) 108,151 (20,649) (2,661) 55,520 (9,456) (14,201) 15,083 533,218 21 (125) (183,586) 71,346 420,873 (25,563) (701) (1,413) 8,045 356 (19,275) 100,000 (594) (95) (404,953) (305,642) 95,955 3,590,970 3,686,925 – 7 – (4) Notes to consolidated financial statements (Notes on going concern assumption) Not applicable. (Notes in the case of material changes in 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), etc. since the beginning of the first three months of the fiscal year under review and recognizes revenue at the amount expected to be received in exchange for the promised goods or services when control of the goods or services is transferred to the customer. The Company applies the Accounting Standard for Revenue Recognition, etc. pursuant to the transitional treatment provided for in the proviso of Paragraph 84 of the Accounting Standard for Revenue Recognition. This has no impact on the beginning balance of retained earnings. The application of the Accounting Standard for Revenue Recognition, etc. has no impact on profit and loss in the first six months of the fiscal year under review, either. In accordance with the transitional treatment stipulated in Article 28-15 of the Accounting Standard for Quarterly Financial Reporting (ASBJ Statement No. 12, issued March 31, 2020), a breakdown of revenue from contracts with customers for the first six months of the previous fiscal year is omitted. (Application of accounting standard for fair value measurement, etc.) The Company applies “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.30, July 4, 2019), etc. from the beginning of the first three months of the consolidated fiscal year under review. In accordance with the transitional treatment set forth in Article 19 of Accounting Standard for Fair Value Measurement and Article 44-2 of “Accounting Standard for Financial Instruments” (ASBJ Statement No.10, July 4, 2019), the Company has applied prospectively a new accounting policy prescribed by Accounting Standard for Fair Value Measurement, etc. The application of the Accounting Standard for Fair Value Measurement has no impact on the quarterly consolidated financial statements for the first six months under review. (Matters concerning consolidated quarterly statements of income) * Losses related to subsidiaries First six months ended March 31, 2021 Not applicable. First six months ended March 31, 2022 The losses related to subsidiaries are chiefly expenses for a recall of some nonconforming products delivered by consolidated subsidiaries and losses related to assets that are expected to become idle assets. They consist of expenses for a recall of 28,925 thousand yen, impairment losses on non-current assets of 54,880 thousand yen, and other losses of 18,573 thousand yen. A breakdown of the impairment losses on assets expected to become idle asses is as shown below. Location Use Type Kikuchi, Kumamoto Business assets (Beauty and Health Products Manufacture and Sale business) Buildings and structures Machinery, equipment and vehicles Software Total Impairment loss (Thousand yen) 9,075 44,654 1,150 54,880 Business assets to which impairment accounting is applied are grouped into units where profits and losses are continually determined. As for idle assets that are not expected to be used, indications of impairment are evaluated for each asset. The book values of those idle assets are reduced to recoverable amounts and the reduced amounts are included in the losses related to subsidiaries. The recoverable amount is measured by value of use, and the value of use is deemed to be zero. – 8 – (Segment information) [Segment information] I. First six months ended March 31, 2021 1. Information regarding amounts of net sales and profit/loss by reportable segment – – (Thousand yen) Amount recorded in the consolidated quarterly statement of income (Thousand yen) Amount recorded in the consolidated quarterly statement of income – – – – Reportable segments Beauty and Health Products Manufacture and Sale business 75 Reportable segments Beauty and Health Products Manufacture and Sale business 59 – – – – Design and Development Outsourcing business 3D Printing business Real Estate Leasing business Total Adjustment (Note) Net sales Sales to outside customers Inter-segment sales and transfers 4,341,270 46,746 82,552 46,335 4,516,904 4,516,904 75 (75) Total 4,341,270 Segment profit (loss) 711,889 46,746 (30,527) 82,627 (34,443) 46,335 15,616 4,516,979 (75) 4,516,904 662,534 (360,052) 302,482 (Note) The adjustment consists of the following items. The adjustment to segment profit (loss), (360,052 thousand yen), is corporate costs that are not allocated to any of the reportable segments. II. First six months ended March 31, 2022 1. Information regarding amounts of net sales and profit/loss by reportable segment Design and Development Outsourcing business 3D Printing business Real Estate Leasing business Total Adjustments (Notes) Net sales Sales to outside customers Inter-segment sales and transfers 4,544,499 51,380 46,926 29,127 4,671,933 4,671,933 59 (59) Total 4,544,499 Segment profit (loss) 845,476 51,380 (6,582) 46,985 (66,580) 29,127 12,400 4,671,992 (59) 4,671,933 784,713 (412,013) 372,699 (Note 1) The adjustment consists of the following items. The adjustment to segment profit (loss), (412,013 thousand yen), is corporate costs that are not allocated to any of the (Note 2) In the first six months of the fiscal year under review, impairment losses of 54,880 thousand yen were posted in the Beauty and Health Products Manufacture and Sales business. For details of the impairment losses, refer to Losses related to subsidiaries in (4) Notes to consolidated financial statements (Matters concerning consolidated quarterly reportable segments. statements of income). 2. Matters concerning the change in reportable segments, etc. As stated in Changes in Accounting Policies, the Company began applying the Revenue Recognition Accounting Standard, etc., and changed the method of accounting in connection with revenue recognition from the first three months of the fiscal year under review. Accordingly, the Company changed the method of calculating profits and losses for its business segments. The change does not have any effects on net sales or profit or loss in each reportable segment in the first six months under review. – 9 – (Matters concerning revenue recognition) Information on the breakdown of revenue from contracts with customers First six months ended March 31, 2022 Design and Development Outsourcing business Reportable segments 3D Printing business Beauty and Health Products Manufacture and Sale business Real Estate Leasing business Total (Thousand yen) Contract for work Dispatch contract Others Revenue from contracts with customers Other revenue 2,776,207 1,739,319 28,971 4,544,499 – Sales to outside customers 4,544,499 – – 51,380 51,380 – 51,380 – – 46,926 46,926 – 46,926 – – – – 29,127 29,127 2,776,207 1,739,319 127,278 4,642,805 29,127 4,671,933 (Note) Other revenue includes lease revenue under the Accounting Standard for Lease Transactions (ASBJ Statement No.13, March 30, 2007). – 10 –