EPCO : Summary of Consolidated Financial Results for the Year Ended December31,2021(Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Year Ended December 31, 2021

(Based on Japanese GAAP)

																							February 14, 2022
Company name:	EPCO Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	2311	URL	http://www.epco.co.jp/
Representative:	President and Group CEO					Yoshiyuki Iwasaki
Inquiries:	Chief Financial Officer					Shinichiro Yoshihara	TEL [phone]
Scheduled date of ordinary general meeting of shareholders:			March 25, 2022
Scheduled date to file Securities Report:							March 25, 2022
Scheduled date to commence dividend payments:					March 28, 2022
Preparation of supplementary material on financial results:			Yes
Holding of financial results meeting:								Yes		(for shareholders and institutional investors)
														(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)
(1) Consolidated financial 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 December 31, 2021		4,696		7.2				437		(0.9)				370		(20.3)		658		50.2
Year ended December 31, 2020		4,380		5.5				441		(21.1)				465		(22.1)		438		2.3
		Earnings per share		Diluted earnings per			Return on equity		Ordinary		Operating
								share										profit/total assets	profit/net sales
			Yen						Yen					%					%			%
Year ended December 31, 2021		73.85					-					14.1					6.3			9.3
Year ended December 31, 2020		49.16					-					11.8					10.3			10.1
(2) Consolidated financial position
			Total assets					Net assets			Equity ratio		Net assets per share
			Millions of yen			Millions of yen							%					Yen
As of December 31, 2021				6,377						5,050							79.2				566.73
As of December 31, 2020				5,401						4,273							79.1				479.52
(3) Consolidated cash flows
		Cash flows from		Cash flows from		Cash flows from	Cash and cash equivalents
		operating activities		investing activities		financing activities		at end of period
			Millions of yen			Millions of yen				Millions of yen		Millions of yen
Year ended December 31, 2021				230						483							(267)				1,794
Year ended December 31, 2020				513						(411)							(267)				1,321
2. Cash dividends
								Annual dividends per share							Total cash	Dividend			Ratio of
																					payout ratio		dividends to
			1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end			Total	dividends (Total)	(Consolidated)			net assets
							(Consolidated)
			Yen				Yen		Yen			Yen			Yen	Millions of yen	%		%
Year ended December 31, 2020		-			12.50				-		17.50		30.00		267	61.0		7.2
Year ended December 31, 2021		-			12.50				-		19.50		32.00		285	43.3		6.1
Year ending December 31, 2022 (Forecast)	-			14.00				-		18.00		32.00			77.7

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3. Forecast of consolidated financial results for the year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

Percentages indicate year-on-year changes

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Earnings per share
			owners of parent
Six months ending	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
2,449	7.8	158	(22.9)	145	(22.2)		99	4.9	11.17
June 30, 2022
Full year	5,105	8.7	460	5.2	501	35.2		366	(44.3)	41.17
4. Notes
(1) Changes in significant subsidiaries during the year ended December 31, 2021			No
(changes in specified subsidiaries resulting in the change in scope of consolidation):
(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:	No
Changes in accounting policies due to other reasons:					No
Changes in accounting estimates:							No
Restatement of prior period financial statements:					No

(3) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of December 31, 2021	9,316,000	shares	As of December 31, 2020	9,316,000	shares
Number of treasury shares at the end of the period
	As of December 31, 2021	404,074	shares	As of December 31, 2020	404,074	shares
Average number of shares during the period
	Year ended December 31, 2021	8,911,926	shares	Year ended December 31, 2020	8,911,940	shares

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Consolidated financial statements

Consolidated balance sheets

			(Thousands of yen)
		As of December 31, 2020	As of December 31, 2021
Assets
Current assets
Cash and deposits	1,641,527	2,147,833
Notes and accounts receivable - trade	626,247	652,903
Work in process	96,839	102,675
Prepaid expenses	48,813	64,965
Income taxes receivable	2,965	1,283
Other	65,966	94,225
Allowance for doubtful accounts	(1,137)	(2,460)
Total current assets	2,481,221	3,061,427
Non-current assets
Property, plant and equipment
Buildings and structures	372,861	383,743
Accumulated depreciation	(145,676)	(175,260)
Buildings and structures, net	227,185	208,482
Tools, furniture and fixtures	481,533	503,301
Accumulated depreciation	(313,662)	(378,470)
Tools, furniture and fixtures, net	167,871	124,830
Other	11,430	10,622
Accumulated depreciation	(7,561)	(8,279)
Other, net	3,869	2,342
Land	139,000	139,000
Total property, plant and equipment	537,926	474,655
Intangible assets
Software	170,106	133,738
Software in progress	10,304	960
Other	16,408	14,676
Total intangible assets	196,818	149,374
Investments and other assets
Investment securities	1,470,000	2,012,320
Shares of subsidiaries and associates	310,713	216,488
Investments in capital of subsidiaries and associates	183,828	232,166
Leasehold and guarantee deposits	198,931	203,681
Deferred tax assets	21,853	26,393
Other	564	624
Total investments and other assets	2,185,892	2,691,673
Total non-current assets	2,920,637	3,315,703
Total assets		5,401,859	6,377,131

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			(Thousands of yen)
		As of December 31, 2020	As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade	39,696	56,447
Accounts payable - other	126,745	129,927
Income taxes payable	163,996	271,500
Advances received	30,718	32,513
Provision for bonuses	29,014	27,419
Provision for shareholder benefit program	1,580	-
Other	212,374	148,592
Total current liabilities	604,127	666,400
Non-current liabilities
Retirement benefit liability	31,533	34,452
Long-term accounts payable - other	11,360	11,360
Deferred tax liabilities	481,255	614,266
Other	124	14
Total non-current liabilities	524,273	660,093
Total liabilities	1,128,400	1,326,494
Net assets
Shareholders' equity
Share capital	87,232	87,232
Capital surplus	118,032	118,032
Retained earnings	3,188,966	3,579,709
Treasury shares	(202,894)	(202,894)
Total shareholders' equity	3,191,336	3,582,080
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	950,441	1,242,994
Deferred gains or losses on hedges	(1,105)	(717)
Foreign currency translation adjustment	132,785	226,279
Total accumulated other comprehensive income	1,082,121	1,468,556
Total net assets	4,273,458	5,050,636
Total liabilities and net assets		5,401,859	6,377,131

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Consolidated statements of income and consolidated statements of comprehensive income

Consolidated statements of income

			(Thousands of yen)
		Year ended December 31, 2020	Year ended December 31, 2021
Net sales	4,380,607	4,696,287
Cost of sales	2,914,752	3,233,830
Gross profit	1,465,854	1,462,457
Selling, general and administrative expenses	1,023,865	1,024,585
Operating profit	441,989	437,872
Non-operating income
Interest income	946	705
Gain on sale of membership	5,000	-
Share of profit of entities accounted for using equity method	11,644	-
Foreign exchange gains	-	3,618
Subsidy income	7,779	2,243
Other	4,459	865
Total non-operating income	29,830	7,432
Non-operating expenses
Share of loss of entities accounted for using equity method	-	72,325
Foreign exchange losses	6,209	-
Other	170	2,094
Total non-operating expenses	6,380	74,419
Ordinary profit	465,438	370,884
Extraordinary income
Gain on sale of businesses	206,472	-
Gain on sale of investment securities	-	622,376
Total extraordinary income	206,472	622,376
Extraordinary losses
Loss on retirement of non-current assets	1,985	2,451
Total extraordinary losses	1,985	2,451
Profit before income taxes	669,925	990,809
Income taxes - current	218,956	358,207
Income taxes - deferred	12,887	(25,500)
Total income taxes	231,843	332,707
Profit	438,081	658,101
Profit attributable to owners of parent	438,081	658,101

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