アルインコ（5933） – [Delayed]Summary of Consolidated Financial Results for the Fiscal Year Ended March 20, 2022

Summary of Consolidated Financial Results for the Fiscal Year Ended March 20, 2022 5933 Company name: ALINCO INCORPORATED Stock code: Representative: Nobuo Kobayashi, Representative Director and President, Chief Operating Officer Contact: Scheduled date of Annual General Meeting of Shareholders: June 17, 2022 May 30, 2022 Scheduled date of payment of dividend: June 20, 2022 Scheduled date of filing of Annual Securities Report: Preparation of supplementary materials for financial results: Yes Takashi Sakaguchi, Director, Managing Executive Officer, General Manager of Accounting and Control Division Holding of financial results meeting: [Japanese GAAP] May 2, 2022 Listing: Tokyo Stock Exchange URL: https://www.alinco.co.jp/ Tel: +81-6-7636-2222 Yes (for securities analysts, institutional investors and individual investors) (All amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for the Fiscal Year Ended March 20, 2022 (March 21, 2021 – March 20, 2022) (1) Consolidated results of operations Net sales Operating profit (Percentages represent year-on-year changes) Profit attributable to owners of parent Ordinary profit Fiscal year ended Mar. 20, 2022 Fiscal year ended Mar. 20, 2021 Note: Comprehensive income Million yen 55,255 53,341 % Million yen 1,119 3.6 2,554 (4.1) Fiscal year ended Mar. 20, 2022: 510 million yen Fiscal year ended Mar. 20, 2021: 2,370 million yen % Million yen 1,126 2,874 (56.2) (23.5) % Million yen 451 1,664 (60.8) (17.0) % (72.9) (22.8) (down 78.5%) (up 31.7%) Fiscal year ended Mar. 20, 2022 Fiscal year ended Mar. 20, 2021 Reference: Equity in earnings of affiliates Yen 23.28 85.32 Net income per share Diluted net income per share Return on equity Ordinary profit to total assets Operating profit to net sales EBITDA Yen – – % 1.6 6.2 % 2.0 5.2 % Million yen 5,318 2.0 6,425 4.8 % (17.2) (10.0) Fiscal year ended Mar. 20, 2022: (878) million yen Fiscal year ended Mar. 20, 2021: (18) million yen Note: EBITDA = Ordinary profit + Depreciation + Amortization of goodwill + Equity in earnings of affiliates (2) Consolidated financial position Equity ratio Total assets Net assets As of Mar. 20, 2022 As of Mar. 20, 2021 Reference: Shareholders’ equity As of Mar. 20, 2022: 27,497 million yen Million yen 58,234 55,443 Million yen 27,518 27,679 Net assets per share Yen 1,413.42 1,428.84 % 47.2 49.8 As of Mar. 20, 2021: 27,597 million yen (3) Consolidated cash flows Fiscal year ended Mar. 20, 2022 Fiscal year ended Mar. 20, 2021 2. Dividends Fiscal year ended Mar. 20, 2021 Fiscal year ended Mar. 20, 2022 Fiscal year ending Mar. 20, 2023 (forecast) Cash flows from operating activities Million yen 2,711 5,293 Cash flows from investing activities Million yen (3,664) (4,681) Cash flows from financing activities Million yen 583 (157) Cash and cash equivalents at end of period Million yen 5,081 5,414 Dividends per share 1Q-end 2Q-end 3Q-end Year-end Total Yen – – Yen 19.00 20.00 Yen – – Yen 19.00 20.00 Yen Million yen 743 793 38.00 40.00 Total dividends Dividend payout ratio (consolidated) % 44.5 171.8 Dividend on net assets (consolidated) % 2.8 2.8 – 20.00 – 20.00 40.00 77.1 3. Consolidated Forecast for the Fiscal Year Ending March 20, 2023 (March 21, 2022 – March 20, 2023) Net sales Operating profit Ordinary profit (Percentages represent year-on-year changes) Net income per share Profit attributable to owners of parent First half Full year Reference: EBITDA forecast for the fiscal year ending March 20, 2023 % Million yen 200 7.2 1,540 5.0 Million yen 28,650 58,020 % Million yen 280 1,660 (78.3) 37.6 % Million yen 160 1,010 (75.9) 47.4 % (78.6) 123.8 5,067 million yen (down 4.7%) Yen 8.22 51.91 * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None Newly added: – (2) Changes in accounting policies and accounting-based estimates, and restatements Excluded: – 1) Changes in accounting policies due to revisions in accounting standards, others: None 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting-based estimates: None 4) Restatements: None (3) Number of shares outstanding (common shares) 1) Number of shares outstanding at the end of the period (including treasury shares) As of Mar. 20, 2022: 21,039,326 shares As of Mar. 20, 2021: 21,039,326 shares 2) Number of treasury shares at the end of the period As of Mar. 20, 2022: 1,584,825 shares As of Mar. 20, 2021: 1,724,357 shares 3) Average number of shares outstanding during the period 19,383,189 shares Fiscal year ended Mar. 20, 2022: Fiscal year ended Mar. 20, 2021: 19,512,254 shares Note: For the purpose of calculating net assets per share, the number of shares of the Company held by the ALINCO Employee Shareholding Association Exclusive Trust Account (506,100 shares as of March 20, 2021, 391,800 shares as of March 20, 2022) under the “Trust-type Employee Shareholding Incentive Plan (E-Ship)” is included in the number of treasury shares, which was to be deducted from the calculation of the number of shares outstanding at the end of the period. For the purpose of calculating net income per share, the Company’s shares held by the trust are also included in the number of treasury shares, which was to be deducted from the calculation of the average number of shares outstanding during the period (506,100 shares for the fiscal year ended March 20, 2021, 453,408 shares for the fiscal year ended March 20, 2022). Reference: Summary of Non-consolidated Financial Results 1. Non-consolidated Financial Results for the Fiscal Year Ended March 20, 2022 (March 21, 2021 – March 20, 2022) (1) Non-consolidated results of operations Net sales Fiscal year ended Mar. 20, 2022 Fiscal year ended Mar. 20, 2021 Fiscal year ended Mar. 20, 2022 Fiscal year ended Mar. 20, 2021 (2) Non-consolidated financial position Operating profit Ordinary profit Million yen 44,655 42,804 % Million yen 1,054 4.3 1,849 (8.0) % Million yen 2,220 2,220 (42.9) (29.1) (0.0) (23.2) % Million yen Profit 568 1,361 % (58.3) (22.1) (Percentages represent year-on-year changes) Net income per share Diluted net income per share Yen – – Yen 29.32 69.78 Total assets Net assets Equity ratio Million yen 53,510 51,230 Million yen 27,167 27,285 As of Mar. 20, 2022 As of Mar. 20, 2021 Reference: Shareholders’ equity As of Mar. 20, 2022: 27,167 million yen *The current financial report is not subject to audit by certified public accountants or auditing firms. *Cautionary statement with respect to forward-looking statements and other special items Net assets per share Yen 1,396.48 1,412.65 % 50.8 53.3 As of Mar. 20, 2021: 27,285 million yen Forecasts of future performance in these materials are based on assumption judged to be valid and information available to the ALINCO’s management at the time the materials were prepared. Actual results may differ materially from the forecasts for a number of reasons. Please refer to “1. Overview of Results of Operations, (5) Outlook” on page 5 for forecast assumptions and notes of caution for usage. ALINCO INCORPORATED (5933) Financial Results for FY3/22 (4) Basic Policy for Profit Distribution and Dividends for the Current and Next Fiscal Years Contents of Attachments 1. Overview of Results of Operations (1) Results of Operations (2) Financial Position (3) Cash Flows (5) Outlook 2. Basic Approach to the Selection of Accounting Standards 3. Consolidated Financial Statements and Notes (1) Consolidated Balance Sheet (2) Consolidated Statements of Income and Comprehensive Income (3) Consolidated Statement of Changes in Equity (4) Consolidated Statement of Cash Flows (5) Notes to Consolidated Financial Statements Going Concern Assumption Significant Changes in Shareholders’ Equity Segment Information Per Share Information Subsequent Events 2 2 4 5 5 5 6 7 7 9 11 13 15 15 15 16 18 18 1 1. Overview of Results of Operations (1) Results of Operations ALINCO INCORPORATED (5933) Financial Results for FY3/22 During the fiscal year ended March 20, 2022, the Japanese economy remained challenging due to many events. As the pandemic continued, the economy was affected by concerns about a global economic slowdown due to the Ukraine crisis, supply chain turmoil, rapidly rising prices of energy and resources, and other events. Furthermore, the outlook for the economy is extremely unclear. In the construction and housing related sectors, which are the primary industry of ALINCO group, there were indications of a recovery in industry trends in the current fiscal year, such as the continuation of year-on-year growth in building construction starts based on floor area. Sales of the new ring lock ALBATROSS system (ALBATROSS), our main product, were much higher than in the previous fiscal year as the market share of this product rose steadily because of the start of shipments to fill new orders received from a major construction company. In the rental business, the utilization rate for rental scaffolding materials recovered to the pre-pandemic level during the summer of 2021 and continued to increase. In the fitness equipment business, however, sales of home fitness equipment fell sharply following record-high sales in the previous fiscal year backed by strong stay-home demand during the pandemic. Sales in the current fiscal year were 55,255 million yen, 3.6% higher than one year earlier, because of the recovery of sales in our core business of scaffolding manufacture, sales and rental. Operating profit decreased 56.2% to 1,119 million yen due to several factors that made expenses significantly higher than anticipated. Major factors include the increase in prices of raw materials, including steel and aluminum, which are affected by the international commodity market prices, and the depreciation of yen. Although selling prices were raised to reflect higher expenses and improve profit margins, the benefit of price increases was limited because of further increases in prices of raw materials and the accelerated yen’s depreciation in a short period of time. Ordinary profit fell 60.8% to 1,126 million yen because of an equity-method loss associated with PT. KAPURINDO SENTANA BAJA (KAPURINDO), an equity-method affiliate in Indonesia because of doubts about the ability of this company to repay long-term loans received from ALINCO. By making investments in KAPURINDO, ALINCO has been involved in Indonesia with the business of renting scaffolding and other construction materials for use at private sector building and civil engineering projects and power plant construction projects. Currently, activity at many construction sites in Indonesia has been temporarily suspended and other construction projects have been delayed or postponed because of the extended impact of the pandemic. Due to this situation, there are doubts about the ability of KAPURINDO to repay long-term loans received from ALINCO. As a result from above, profit attributable to owners of parent decreased 72.9% to 451 million yen, although there is a record of extraordinary income because of subsidy income related to Fukuchiyama Logistic Center and partial sales of cross-shareholding. HIGASHI ELECTRONICS INDUSTRY CO., LTD. (Higashi Electronics Industry) and UEKIN Co. Ltd. (Uekin) have been added to the consolidated financial statements based on an acquisition date of July 31, 2021 and November 30, 2021, respectively, for accounting purposes. Consequently, the income statement for the current fiscal year includes results of operations of Higashi Electronics Industry for the six-month period from August 1, 2021 to January 31, 2022 and of Uekin for the three-month period from December 1, 2021 to February 28, 2022. (Higashi Electronics Industry is in the electronic equipment segment and Uekin is in the construction materials segment.) Major components of year-on-year changes in sales and earnings 2 FY3/21 FY3/22 YoY change Major components of changes Net sales 53,341 55,255 +1,914 (+683) ALINCO INCORPORATED (5933) Financial Results for FY3/22 (Millions of yen) Increase in sales of scaffolding materials (+2,918) Two newly consolidated subsidiaries (+769) Increase in scaffolding material rental business sales Lower fitness equipment sales due to a decline following strong pandemic stay-at-home demand (-2,190) Higher earnings due to higher sales (+539) Decrease in amortization of goodwill (+210) Rising costs of raw materials including steel and aluminum (-985) (-591) business (-239) Lower profit margins in the scaffolding material rental Increase in freight rates (-53) Increase in gain on sales of scrap and other miscellaneous income (+206) Increase in foreign exchange gain due to hedging effect of foreign exchange contract, etc. (+197) Valuation gain on foreign currency-denominated assets (+65) Increase in equity-method loss (-860) Lower taxes due to decline in earnings (+283) Increase in extraordinary income due to subsidy income related to construction of Fukuchiyama Logistic Center (+124) Operating profit 2,554 1,119 (1,435) Rising procurement cost due to the depreciation of yen Ordinary profit 2,874 1,126 (1,748) Profit attributable to owners of parent 1,664 451 (1,213) The performance for each business segment was as follows. Segment sales do not include intersegment sales. (Millions of yen) Net sales Segment profit (loss) Amount YoY change (%) Amount YoY change (%) Segment Construction materials Scaffolding material rental Home equipment Electronic equipment Total for reportable segments 19,880 15,948 15,070 4,355 55,255 14.3 4.5 (11.0) 16.1 3.6 1,349 86 (200) 153 1,389 Adjustment Amounts shown on consolidated statement of income Notes: 1. Segment profit (loss) is adjusted to be consistent with ordinary profit in the consolidated statement of income. 55,255 1,126 (263) 3.6 – – 2. The adjustment to segment profit (loss) is primarily non-operating income and expenses, such as equity-method income and losses, foreign exchange gains and losses, and interest expenses that cannot be allocated to a reportable segment. In accordance with “Practical Guidelines on Equity method Accounting,” an equity-method loss of 878 million yen was recorded for long-term loans extended by ALINCO to equity-method affiliate PT. KAPURINDO SENTANA BAJA. Construction materials Sales increased 14.3% from one year earlier to 19,880 million yen. Sales of scaffolding and other temporary materials used at construction sites rose sharply by 57.7% year on year because of sales to new customers such as start of ALBATROSS shipments to a major construction company that decided to adopt this scaffolding system and additional ALBATROSS sales to current customers. In addition, sales of racks for distribution warehouses also remained strong. (4.4) 54.6 185.7 (45.5) – – (60.8) 3 ALINCO INCORPORATED (5933) Financial Results for FY3/22 Although sales increased, the segment profit decreased 4.4% to 1,349 million yen because the increases in selling prices of the products of this segment could not keep up with the speed of the upturn in prices of steel, aluminum and other materials. Scaffolding material rental Sales increased 4.5% from one year earlier to 15,948 million yen. The utilization rate of rental scaffolding materials for medium to high-rise buildings increased. There were also strong sales for event-related rental equipment, which had been significantly affected by the pandemic, associated with the Tokyo Olympics. The segment profit increased 30 million yen (up 54.6%) year-on-year to 86 million yen, partially due to the intense price-based competition during the pandemic. Home equipment Sales decreased 11.0% from one year earlier to 15,070 million yen. Sales of aluminum ladders, stepladders and other products remained firm despite the impact of factors such as restrictions on outings due to the pandemic, which reduced footfall at mass retailers, and the continued restraint on the holding of exhibitions. However, sales of fitness equipment were down significantly because of a decline following the record-high sales in the previous fiscal year backed by stay-at-home demand and pandemic-related delays in the development of new fitness products. There was a segment loss of 200 million yen, a decrease of 1,230 million yen from the profit one year earlier. The loss was caused by a decrease in sales, the higher cost of importing materials and supplies due to higher raw material prices and logistics costs as well as the yen’s depreciation. Electronic equipment Sales increased 16.1% from one year earlier to 4,355 million yen. We managed to minimize the negative impact on the supply chain of the current shortage of electronic components, primarily semiconductor components. In addition, sales increased as this business benefited from the recovery in demand for specified low-power wireless communication devices and wireless communication devices for business applications. The purchase of all shares of Higashi Electronics Industry to include this company in the scope of consolidation also contributed to sales growth. The segment profit increased 185.7% to 153 million yen from one year earlier because of the sales growth despite expenses of 47 million yen related to stock acquisition through M&A. (2) Financial Position Total assets increased 2,790 million yen from the end of the previous fiscal year to 58,234 million yen as of the end of the current fiscal year. Current assets increased 3,250 million yen to 36,435 million yen and non-current assets decreased 460 million yen to 21,798 million yen. The main reasons for the increase in total assets were the inclusion of Higashi Electronics Industry and Uekin in the scope of consolidation, an increase in inventories resulting from consistently high production volume in anticipation of increasing demand, and an increase in property, plant and equipment caused by the start of full-scale operations at the Fukuchiyama Logistic Center and purchases of rental assets. Assets Liabilities Total liabilities increased 2,951 million yen from the end of the previous fiscal year to 30,716 million yen. Current liabilities increased 3,846 million yen to 20,005 million yen and non-current liabilities decreased 895 million yen to 10,710 million yen. The main reasons for the increase in liabilities were a 2,429 million yen increase in notes and accounts payable-trade due to consistently high production volume and a 1,510 million yen increase in borrowings. 4 Net assets ALINCO INCORPORATED (5933) Financial Results for FY3/22 Total net assets decreased 160 million yen from the end of the previous fiscal year to 27,518 million yen because of profit attributable to owners of parent of 451 million yen and dividend payments of 773 million yen. (3) Cash Flows Cash and cash equivalents at the end of the current fiscal year decreased by 332 million yen from the end of the previous fiscal year to 5,081 million yen. Cash flows from operating activities Net cash provided by operating activities was 2,711 million yen (a decrease of 2,582 million yen compared with the previous fiscal year). The main factors were a decrease in profit before income taxes and an increase in trade receivables with a relatively long collection period because of the growth of sales in core business activities. Cash flows from investing activities Net cash used in investing activities was 3,664 million yen (a decrease of 1,016 million yen compared with the previous fiscal year). The main uses of cash were purchase of property, plant and equipment mainly due to the start of operations at the Fukuchiyama Logistic Center and additional purchase of shares of consolidated subsidiary. Cash flows from financing activities Net cash provided by financing activities was 583 million yen (net cash used of 157 million yen in the previous fiscal year). The main reason was an increase in short-term borrowings to provide cash on hand for ensuring the flexibility required to respond to shifts in demand during the current uncertain business climate. (4) Basic Policy for Profit Distribution and Dividends for the Current and Next Fiscal Years Distributing earnings to shareholders is one of the highest priorities of ALINCO. For dividends of surplus, our basic policy is to consistently pay annual dividend with a target dividend payout ratio of 40%. Our policy for purchasing treasury shares is to make these purchases appropriately by responding with flexibility to changes in the stock price and business climate, implementing measures involving equity, and as one way to distribute earnings to shareholders. Retained earnings are used for investments to improve our corporate value such as, expanding market share of ALBATROSS, developing new products in business sectors that are expected to grow in the future, performing M&A and any other activities. Our policy for retained earnings also reflects the need for the financial stability required for maintaining our competitive advantage over other companies. Based on these policies, we plan to pay a year-end dividend of 20 yen per share for the fiscal year ended March 20, 2022. With the interim dividend of 20 yen per share that was paid on November 24, 2021, this will result in a total dividend of 40 yen per share applicable to the fiscal year. Based on the outlook for earnings, capital expenditures and other items, we plan to pay a dividend of 40 yen per share for the fiscal year ending in March 2023. (5) Outlook In April 2021, the ALINCO Group formulated the “Medium-Term Management Plan 2024” with an execution period of three years from the fiscal year ending March 2022 to the fiscal year ending March 2024. The fiscal year ending in March 2023 is the second year of this plan. Since the plan started, sales have been increasing steadily. One reason is measures for strengthening and expanding the manufacture, sale and rental of scaffolding materials, which is the ALINCO Group’s core business. There has also been progress with building a sound base for the growth of other businesses, including a major construction company that has decided to adopt ALBATROSS. However, in terms of profit, the progress of the plan for the fiscal year ending March 2022, which was the first year of the plan, has 5 ALINCO INCORPORATED (5933) Financial Results for FY3/22 been restricted due to a downturn in pandemic stay-at-home demand in the fitness equipment business following the peak in the previous fiscal year and the unexpectedly large impact of sharp rise of raw materials price, etc., on construction materials and home equipment businesses. There are currently concerns about the rise in cost of energy and resources because of Russia’s invasion of Ukraine. In China, there are concerns about how much the country’s extended zero-COVID policy will impact the economy. These events are likely to have an effect on supply chains. The ALINCO Group will meet the large volume of demand at customers in locations where economies are recovering from the pandemic downturn. We will also launch new products, raise product prices and take other steps to improve profitability. Regarding prices of raw materials, assuming that the actual price of main materials in March 2021 is 100, the prices have risen to 150-170 in March 2022. The pace of price increases has been particularly very fast since October 2021 and we have been moving quickly to raise prices since the second half of the previous fiscal year. However, a certain period of time was needed to fill orders that were received at prices before these increases. In addition, we implemented price hikes prudently to prevent a significant decline in the willingness of customers to purchase our products. As a result, we expect that time will be needed to improve profitability. Consequently, the second half accounts for more than half of the earnings forecast for the fiscal year ending in March 2023 due to the outlook for the full benefit of higher prices of our products to emerge in the fiscal year’s second half. On April 4, 2022, the stock listing of ALINCO was moved to the Prime Market of the Tokyo Stock Exchange, which is one of the exchange’s new market segments. Forecasts for the fiscal year ending March 20, 2023 are as follows. (Millions of yen) YoY change (%) YoY change (%) FY3/23 First-half forecast 28,650 200 280 160 FY3/23 Full-year forecast 58,020 1,540 1,660 1,010 7.2 (78.3) (75.9) (78.6) 5.0 37.6 47.4 123.8 Net sales Operating profit Ordinary profit Profit attributable to owners of parent 2. Basic Approach to the Selection of Accounting Standards The ALINCO Group will continue to prepare consolidated financial statements using generally accepted accounting principles in Japan for the time being based on the stance that these financial statements are appropriate for providing information concerning the group’s results of operations, financial position and cash flows. We will take suitable actions with regard to the application of International Financial Reporting Standards (IFRS) by taking into account associated factors in Japan and other countries. 6 3. Consolidated Financial Statements and Notes (1) Consolidated Balance Sheet ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (As of Mar. 20, 2021) (Thousands of yen) FY3/22 (As of Mar. 20, 2022) Assets Current assets Cash and deposits Notes and accounts receivable-trade Merchandise and finished goods Work in process Raw materials Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Rental assets Accumulated depreciation Accumulated impairment loss Rental assets, net Buildings and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Land Other Accumulated depreciation Accumulated impairment loss Other, net Total property, plant and equipment Intangible assets Goodwill Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Distressed receivables Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 5,535,238 14,597,524 8,427,257 1,192,425 2,430,463 1,024,220 (21,901) 33,185,229 25,621,129 (21,707,320) (298,857) 3,614,952 11,160,814 (7,398,587) 3,762,227 5,181,525 (3,996,403) 1,185,121 5,095,600 4,287,878 (3,392,528) (19,388) 875,961 14,533,863 980,156 223,860 1,204,016 1,671,110 1,298,068 3,134 2,410,670 107,930 1,036,034 (6,184) 6,520,764 22,258,644 55,443,873 7 5,230,964 15,214,815 9,743,820 1,718,326 3,335,110 1,215,981 (23,064) 36,435,954 25,804,842 (21,852,312) (297,884) 3,654,644 12,359,000 (7,891,080) 4,467,919 6,146,658 (5,071,292) 1,075,365 5,233,361 4,248,203 (3,619,353) (18,777) 610,072 15,041,364 945,138 197,457 1,142,595 1,520,681 497,742 216 2,448,818 70,152 1,080,227 (3,266) 5,614,573 21,798,532 58,234,486 Liabilities Current liabilities Income taxes payable Provision for bonuses Other Total current liabilities Non-current liabilities Long-term borrowings Notes and accounts payable-trade Short-term borrowings Current portion of long-term borrowings Retirement benefit liability Provision for retirement benefits for directors (and other officers) Deferred tax liabilities 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 Deferred gains or losses on hedges 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 ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (As of Mar. 20, 2021) (Thousands of yen) FY3/22 (As of Mar. 20, 2022) 7,267,563 463,200 5,068,624 662,320 714,390 1,983,181 16,159,280 10,347,955 192,189 186,336 440,073 439,034 11,605,588 27,764,869 6,361,596 4,922,140 17,043,168 (1,449,359) 26,877,545 163,324 64,647 249,004 243,398 720,375 81,083 27,679,004 55,443,873 9,697,387 2,822,900 5,168,672 246,712 702,100 1,368,127 20,005,899 9,398,709 223,071 172,420 495,873 420,317 10,710,392 30,716,291 6,361,596 4,943,927 16,720,926 (1,317,599) 26,708,851 71,251 106,209 430,551 180,588 788,600 20,742 27,518,195 58,234,486 8 (2) Consolidated Statements of Income and Comprehensive Income Consolidated Statement of Income ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) (Thousands of yen) FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) Net sales of merchandise and finished goods Cost of merchandise and finished goods sold Net sales Rental income Total net sales Cost of sales A rental cost price Total cost of sales Gross profit Operating profit Non-operating income Interest income Dividend income Selling, general and administrative expenses Rental income from land and buildings Foreign exchange gains Gain on sales of scrap and waste Other Total non-operating income Non-operating expenses Interest expenses Paying rents Product recall expense Litigation expenses Share of loss of entities accounted for using equity method Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of property, plant and equipment Gain on sale of investment securities Loss on retirement of property, plant and equipment Subsidy income Total extraordinary income Extraordinary losses Impairment losses Total extraordinary losses Profit before income taxes Income taxes-current Income taxes-deferred Total income taxes Profit Profit (loss) attributable to non-controlling interests Profit attributable to owners of parent 9 38,231,270 15,110,439 53,341,709 26,841,716 11,470,187 38,311,904 15,029,804 12,475,114 2,554,689 32,082 82,593 57,879 154,161 123,752 119,293 569,762 49,805 24,460 65,123 41,940 18,023 50,807 250,160 2,874,291 635 120,285 120,921 – 18,117 54,000 72,117 2,923,094 1,230,207 (21,148) 1,209,059 1,714,035 49,172 1,664,863 39,528,554 15,727,236 55,255,790 29,718,601 12,134,736 41,853,338 13,402,452 12,283,374 1,119,077 36,609 64,358 27,299 415,839 330,034 123,316 997,459 50,233 24,460 – – – 878,567 37,242 990,504 1,126,032 2,055 67,791 175,630 245,476 8,128 8,128 1,363,380 813,872 112,017 925,889 437,490 (13,794) 451,284 Consolidated Statement of Comprehensive Income Profit Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges 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 ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) 1,714,035 (Thousands of yen) FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) 437,490 256,873 (27,933) (212,745) 590,101 50,091 656,387 2,370,423 2,321,760 48,662 (92,072) 41,561 250,773 (62,810) (64,836) 72,616 510,107 519,510 (9,403) 10 (3) Consolidated Statement of Changes in Equity FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) ALINCO INCORPORATED (5933) Financial Results for FY3/22 Share capital Capital surplus Treasury shares Balance at beginning of period 6,361,596 4,817,366 16,107,041 (896,979) Balance at end of period 6,361,596 4,922,140 17,043,168 (1,449,359) 26,877,545 – 104,773 936,126 (552,379) 488,520 Accumulated other comprehensive income Valuation difference on available-for- sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non- controlling interests Total net assets (93,549) 92,580 411,148 (346,702) 63,477 971,891 27,424,393 Shareholders’ equity Retained earnings (743,714) 1,664,863 104,773 (968,478) (968,478) 416,098 520,872 14,977 14,977 (Thousands of yen) Total shareholders’ equity 26,389,024 (743,714) 1,664,863 (743,714) 1,664,863 (968,478) 520,872 14,977 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Effect of changes in accounting period of consolidated subsidiaries Net changes in items other than shareholders’ equity Total changes during period Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Effect of changes in accounting period of consolidated subsidiaries Net changes in items other than shareholders’ equity Total changes during period Balance at end of period 256,873 (27,933) (162,143) 590,101 656,897 (890,807) (233,909) 256,873 (27,933) (162,143) 590,101 656,897 (890,807) 254,611 163,324 64,647 249,004 243,398 720,375 81,083 27,679,004 11 Share capital Capital surplus Treasury shares Balance at beginning of period 6,361,596 4,922,140 17,043,168 (1,449,359) ALINCO INCORPORATED (5933) Financial Results for FY3/22 Shareholders’ equity Retained earnings 6,545 15,241 (773,526) 451,284 (Thousands of yen) Total shareholders’ equity 26,877,545 (773,526) 451,284 15,241 131,760 138,305 FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) Changes during period Dividends of surplus Profit attributable to owners of parent Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders’ equity Total changes during period Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at end of period 6,361,596 4,943,927 16,720,926 (1,317,599) 26,708,851 – 21,787 (322,241) 131,760 (168,694) Accumulated other comprehensive income Valuation difference on available-for- sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non- controlling interests Total net assets 163,324 64,647 249,004 243,398 720,375 81,083 27,679,004 (773,526) 451,284 138,305 15,241 (92,072) 41,561 181,546 (62,810) 68,225 (60,341) 7,884 (92,072) 41,561 181,546 (62,810) 68,225 (60,341) (160,809) 71,251 106,209 430,551 180,588 788,600 20,742 27,518,195 12 (4) Consolidated Statement of Cash Flows Cash flows from operating activities Profit before income taxes Depreciation Amortization of goodwill Impairment losses Subsidy income Increase (decrease) in allowance for doubtful accounts 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 Foreign exchange losses (gains) Share of loss (profit) of entities accounted for using equity method Loss (gain) on sale and retirement of property, plant and equipment Loss (gain) on sale of investment securities Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Increase (decrease) in accrued consumption taxes Interest and dividends received Other, net Subtotal Interest paid Subsidies received Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities 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 Purchase of shares of subsidiaries Purchase of shares of subsidiaries resulting in change in scope of consolidation Loan advances Proceeds from collection of loans receivable Payments of leasehold and guarantee deposits Proceeds from refund of leasehold and guarantee deposits Payments of construction assistance fund receivables Other, net ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) (Thousands of yen) FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) 2,923,094 3,015,290 517,533 54,000 4,532 (16,181) 83,964 – – (114,676) 49,805 (69,683) 18,023 17,481 (120,285) 841,514 (275,721) (973,205) 250,190 271,778 6,477,457 114,615 (48,815) (1,249,765) 5,293,492 (3,325,000) 1,240 (82,927) (6,073) 315,593 (1,500,000) – – – (126,750) 21,850 (14,377) 6,028 – 29,115 1,363,380 3,006,895 306,613 – (175,630) (5,959) (12,290) (114,642) (38,916) (100,968) 50,233 (189,239) 878,567 6,073 (67,791) (277,560) (2,609,599) 2,077,728 (556,006) 148,756 3,689,643 101,044 (48,284) 175,630 (1,206,684) 2,711,349 136,460 (3,289,480) 5,700 (66,399) (6,261) 102,479 – (596,076) (63,735) 40,873 (32,133) 4,382 (7,700) 107,405 Net cash provided by (used in) investing activities (4,681,301) (3,664,484) 13 Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Purchase of shares of subsidiaries not resulting in change in scope of consolidation Proceeds from disposal of treasury shares Purchase of treasury shares Dividends paid Other, net 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 Increase (decrease) in cash and cash equivalents resulting from change in fiscal year end of consolidated subsidiaries Cash and cash equivalents at end of period ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) (Thousands of yen) FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) (705,700) 7,236,000 (5,440,947) – – (472,500) (743,203) (30,773) (157,124) (92,435) 362,631 4,991,998 59,378 5,414,007 2,359,700 4,820,000 (5,882,726) (36,716) 112,014 – (773,065) (16,138) 583,068 37,650 (332,416) 5,414,007 – 5,081,591 14 ALINCO INCORPORATED (5933) Financial Results for FY3/22 (5) Notes to Consolidated Financial Statements Going Concern Assumption Not applicable. Significant Changes in Shareholders’ Equity Not applicable. 15 ALINCO INCORPORATED (5933) Financial Results for FY3/22 Segment and Other Information Segment Information 1. Overview of reportable segments Segments used for financial reporting are the ALINCO Group’s constituent units for which separate financial information is available and for which Board of Directors performs periodic studies for the purposes of determining the allocation of resources and evaluating performance. The ALINCO Group consists of business segments that are based on categories of products and services. There are four reportable segments: construction materials, scaffolding material rental, home equipment and electronic equipment. Products and services in these reportable segments are as follows: Construction materials: Scaffolding materials, logistics storage equipment Scaffolding material rental: Rental of scaffolding materials for low-rise and medium to high-rise buildings, and temporary bleachers Home equipment: Ladders, stepladders; aluminum and plastic moldings; stationary elevating workbenches; surveying and laser equipment; aluminum bridge, various type of carts and folding handcarts; fitness equipment Electronic equipment: 2. Calculation method for net sales, profit or loss, assets, and other items for reportable segments Wireless communication devices The accounting treatment methods for reportable segments comply with accounting policies used for the preparation of the consolidated financial statements. Segment profit is affected by changes in foreign exchange rates. Foreign exchange gains and losses resulting from forward exchange contracts and other foreign exchange rate instruments used for business purposes for import transactions are reflected in operating profit, and this adjusted operating profit is used for segment profit. 3. Information related to net sales, profit or loss, assets, and other items for reportable segments FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) Reportable segment Construction materials Scaffolding material rental Home equipment Electronic equipment Total Adjustment 17,400,080 15,265,180 16,925,106 3,751,341 53,341,709 53,341,709 2,612,259 3,484 253,071 17,085 2,885,901 (2,885,901) Total 20,012,340 15,268,665 17,178,178 3,768,426 56,227,610 (2,885,901) 53,341,709 Segment profit 1,410,828 56,141 1,029,621 53,820 2,550,410 323,880 2,874,291 Segment assets 21,036,654 11,773,833 12,580,787 3,349,380 48,740,654 6,703,219 55,443,873 Net sales External sales Inter-segment sales and transfers Other items 526,246 Depreciation Increase in property, plant and equipment and intangible assets Notes: 1. Segment profit is adjusted to be consistent with ordinary profit in the consolidated statement of income. 2,091,109 3,041,612 2,933,711 2,112,971 721,069 148,237 330,816 202,814 81,578 81,195 91,679 3,015,290 3,372,428 2. The 323,880 thousand yen segment profit adjustment is primarily corporate items, which are non-operating income and expenses, such as equity-method income and losses, foreign exchange gains and losses, and interest expenses, that cannot be allocated to a reportable segment. (Thousands of yen) Amounts shown on consolidated financial statements – – 16 ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) Reportable segment (Thousands of yen) Amounts shown on consolidated financial statements – – Construction materials Scaffolding material rental Home equipment Electronic equipment Total Adjustment 19,880,910 15,948,551 15,070,539 4,355,790 55,255,790 55,255,790 2,513,672 25,184 297,384 18,382 2,854,624 (2,854,624) 22,394,582 15,973,736 15,367,923 4,374,172 58,110,414 (2,854,624) 55,255,790 Segment profit (loss) 1,349,140 86,792 (200,646) 153,768 1,389,053 (263,021) 1,126,032 Segment assets 22,995,822 11,568,858 12,422,182 4,831,684 51,818,548 6,415,938 58,234,486 Net sales External sales Inter-segment sales and transfers Total Other items 577,527 Depreciation Increase in property, plant and equipment and intangible assets Notes: 1. Segment profit (loss) is adjusted to be consistent with ordinary profit in the consolidated statement of income. 2,081,165 2,073,576 2,919,199 3,242,076 189,686 725,547 377,166 78,408 87,696 58,195 87,633 3,006,895 3,329,709 2. The -263,021 thousand yen segment profit (loss) adjustment is primarily corporate items, which are non-operating income and expenses, such as equity-method income and losses, foreign exchange gains and losses, and interest expenses, that cannot be allocated to a reportable segment. In accordance with “Practical Guidelines on Equity Method Accounting,” an equity method loss of 878,567 thousand yen was recorded for long-term loans extended by ALINCO to equity-method affiliate PT. KAPURINDO SENTANA BAJA. 4. Information related to impairment losses on non-current assets or goodwill, etc. for reportable segments Impairment losses related to non-current assets FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) Construction materials Scaffolding material rental Home equipment Electronic equipment Adjustment Impairment loss – 54,000 – – (Thousands of yen) Amounts shown on consolidated financial statements 54,000 – FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) Not applicable. Significant change in goodwill FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) In the construction materials business, a consolidated subsidiary Sofuku Koki Co., Ltd. became a wholly owned subsidiary as an additional equity investment was made by ALINCO in FY3/21. As a result of this transaction, goodwill in the segment increased 286,103 thousand yen in FY3/21. In the electronic equipment segment, ALINCO acquired all shares of Higashi Electronics Industry on August 18, 2021, and made this company a consolidated subsidiary in FY3/22. The matter caused an increase of goodwill by 109,349 thousand yen in FY3/22. In the construction materials segment, ALINCO acquired all shares of Uekin on November 24, 2021, and made this company a consolidated subsidiary in FY3/22. The matter caused an increase of goodwill by 140,715 thousand yen in FY3/22. 17 Per Share Information Net assets per share (Yen) 23.28 451,284 451,284 19,383,189 27,518,195 20,742 [20,742] ALINCO INCORPORATED (5933) Financial Results for FY3/22 FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) 1,428.84 FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) 1,413.42 FY3/21 (Mar. 21, 2020 – Mar. 20, 2021) FY3/22 (Mar. 21, 2021 – Mar. 20, 2022) Net income per share Note: Basis of calculation 1. The basis of calculating net income per share and diluted net income per share is as follows: 85.32 Net income per share Profit attributable to owners of parent (Thousands of yen) Profit attributable to owners of parent applicable to common shares (Thousands of yen) Average number of shares outstanding (Shares) Note: Diluted net income per share is not presented because there are no latent shares. 2. The basis of calculating net assets per share is as follows: 1,664,863 1,664,863 19,512,254 27,679,004 81,083 [81,083] FY3/21 (As of Mar. 20, 2021) FY3/22 (As of Mar. 20, 2022) Total net assets (Thousands of yen) Deduction on total net assets (Thousands of yen) [of which non-controlling interests (Thousands of yen)] 27,597,921 Net assets applicable to common shares (Thousands of yen) Number of common shares at end of period used in calculation of net assets per share (Shares) Note: For the purpose of calculating net assets per share, the number of shares of the Company held by the ALINCO Employee Shareholding Association Exclusive Trust Account (506,100 shares as of March 20, 2021, 391,800 shares as of March 20, 2022) under the “Trust-type Employee Shareholding Incentive Plan (E-Ship)” is included in the number of treasury shares, which was to be deducted from the calculation of the number of shares outstanding at the end of the period. For the purpose of calculating net income per share, the Company’s shares held by the trust are also included in the number of treasury shares, which was to be deducted from the calculation of the average number of shares outstanding during the period (506,100 shares for the fiscal year ended March 20, 2021, 453,408 shares for the fiscal year ended March 20, 2022). 19,314,969 19,454,501 27,497,452 Subsequent Events Not applicable. This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation. 18