Advantest : Quarterly Financial Report (FY2022 Q1)

(Translation)

This document has been translated from the Quarterly Securities Report for the three-month period ended June 30, 2022, pursuant to the Financial Instruments and Exchange act of Japan. In the event of any discrepancy between this document and the Japanese original, the original shall prevail.

Quarterly Securities Report

From April 1, 2022 to June 30, 2022

(First Quarter of the 81st term)

Advantest Corporation

Table of Contents

		Page
Cover
Part I Information on the Company
Item1 Company Overview
1	Trends in Main Management Indicators.………………………………………………………….	1
2	Description of Business……………………………………………………………………………	1
Item2 Business Overview
1	Risk Factors …………………………………………………………………………………….…	2

2 Management's Discussion and Analysis of Financial Condition, Operating Results and Cash

Flows………………………………………………………………………………………………. 2

3	Material Contracts …………………………………………………………………………………	5
Item3	Status of the Company
1	Status of Shares
	(1)	Total Number of Shares …………………………………………………………………………	6
	(2)	Status of Stock Acquisition Rights .……………………………………………....……………..	6
	(3)	Status in the Exercise of Bonds with Share Options with Exercise Price Amendment.…………	6
	(4)	Changes in the Total Number of Issued Shares and the Amount of Common Stock and Others..	6
	(5) Major Shareholders ………………………………………………………………..............……	6
	(6)	Status of Voting Rights …………………………………………………………………………	7
2	Directors …………………………………………………………………...............………………	7
Item4	Financial Information ………………………………………………………………………………	8
1	Condensed Quarterly Consolidated Financial Statements
	(1)	Condensed Quarterly Consolidated Statement of Financial Position …………………………	9
	(2)	Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly
		Consolidated Statement of Comprehensive Income ……………………………………………	10
		Condensed Quarterly Consolidated Statement of Profit or Loss ………………………………	10
		Condensed Quarterly Consolidated Statement of Comprehensive Income ……………………	11
	(3)	Condensed Quarterly Consolidated Statement of Changes in Equity …………………………	12
	(4)	Condensed Quarterly Consolidated Statement of Cash Flows …………………………………	13
2	Others …………………………………………………………………………………………...…	24
Part Ⅱ Information on the Guarantee Companies of the Company...........…………………………………	25

Independent Auditor's Quarterly Review Report

Confirmation Letter

[Cover]

［Document Filed］	Quarterly Securities Report ("Shihannki Hokokusho")
［Applicable Law］	Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of
	Japan
［Filed to］	Director, Kanto Local Finance Bureau
［Filing Date］	August 12, 2022
［Fiscal Year］	The First Quarter of the 81st Term (from April 1, 2022 to June 30, 2022)
［Company Name］	Kabushiki Kaisha Advantest
［Company Name in English］	ADVANTEST CORPORATION
［Title and Name of Representative］	Yoshiaki,Yoshida, Representative Director, President and CEO
［Address of Registered Office］	1-6-2, Marunouchi, Chiyoda-ku, Tokyo
［Phone No.］	[phone]
［Contact Person］	Atsushi Fujita, Director, Senior Executive Officer
	Executive Vice President, Corporate Administration Group
［Contact Address］	1-6-2, Marunouchi, Chiyoda-ku, Tokyo
［Phone No.］	[phone]
［Contact Person］	Atsushi Fujita, Director, Senior Executive Officer
	Executive Vice President, Corporate Administration Group
［Place Where Available for Public Inspection］	Tokyo Stock Exchange, Inc.
	(2-1, Nihombashi Kabuto-cho,Chuo-ku, Tokyo)

This is an English translation of the Quarterly Securities Report filed with the Director of the Kanto Local Finance Bureau via Electronic Disclosure for Investors' NETwork ("EDINET") pursuant to the Financial Instruments and Exchange Act of Japan.

In this report, Advantest Corporation is hereinafter referred to as the "Company" and together with its consolidated subsidiaries as "Advantest".

"¥", "yen" or (Y) means Japanese yen.

Cautionary Statement with Respect to Forward-Looking Statements

This Quarterly Securities Report contains "forward-looking statements" that are based on Advantest's current expectations, estimates and projections. These statements include, among other things, the discussion of Advantest's business strategy, outlook and expectations as to market and business developments, production and capacity plans. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "intend," "project," "should" and similar expressions. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause Advantest's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including:

•changes in demand for the products and services produced and offered by Advantest's customers, including semiconductors, communications services and electronic goods;

•circumstances relating to Advantest's investment in technology, including its ability to timely develop products that meet the changing needs of semiconductor manufacturers and communications network equipment and components makers and service providers;

•the environment in which Advantest purchases materials, components and supplies for the production of its products, including the availability of necessary materials, components and supplies during a significant expansion in the market in which Advantest operates; and

•changes in economic conditions, competitive environment, currency exchange rates or political stability in the major markets where Advantest produces, distributes or sells its products.

These risks, uncertainties and other factors also include those identified in "Risk Factors" and set forth elsewhere in Advantest's most recent Annual Securities Report.

Part I. Information on the Company

Item1. Company Overview

1. Trends in Main Management Indicators

Business Term		The 80th	The 81st	The 80th
Accounting Period		Three months ended	Three months ended	Fiscal Year ended
	June 30, 2021	June 30, 2022	March 31, 2022
Net sales	Millions	97,116	135,943	416,901
of Yen
Income before income taxes	Millions	25,741	48,416	116,343
of Yen
Net income attributable to owners	Millions	19,344	36,496	87,301
of the parent	of Yen
Comprehensive income attributable	Millions	19,875	46,068	107,286
to owners of the parent	of Yen
Equity attributable to owners of the parent	Millions	284,986	327,879	294,621
of Yen
Total assets	Millions	428,169	531,098	494,696
of Yen
Basic earnings per share	Yen	98.42	192.14	449.56
Diluted earnings per share	Yen	97.87	191.34	447.26
Ratio of equity attributable to owners	%	66.6	61.7	59.6
of the parent
Cash flows from operating activities	Millions	14,585	4,008	78,889
of Yen
Cash flows from investing activities	Millions	(3,058)	(4,285)	(46,907)
of Yen
Cash flows from financing activities	Million	(15,775)	(13,689)	(68,736)
Yen
Cash and cash equivalents at the end of period	Millions	145,062	107,471	116,582
of Yen

(Note) Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (hereinafter referred to as the "IFRS").

2. Description of Business

There are no significant changes in the business operated by the Company and Advantest during the three

months ended June 30, 2022. There are also no transfer changes in major affiliated companies.

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Item2. Business Overview

1. Risk Factors

There were no risks newly identified during the three months ended June 30, 2022.

There was no material change in risk factors which were described in the Annual Securities Report for the fiscal year ended March 31, 2022.

2. Management's Discussion and Analysis of Financial Condition, Operating Results and Cash Flows

1. Overview of Business Results

Consolidated Financial Results of FY2022 Q1 (April 1, 2022 through June 30, 2022)

(in billion yen)

			As compared to the
	Three months ended	Three months ended	corresponding period
	of the previous
	June 30, 2021	June 30, 2022
	fiscal year
			increase (decrease)
Net sales	97.1	135.9	40.0%
Operating income	26.1	44.8	71.4%
Income before income taxes	25.7	48.4	88.1%
Net income	19.3	36.5	88.7%

During Advantest's three-month period ended June 30, 2022, inflation continued in Japan and overseas due to the rise in resource prices stemming from the situation in Ukraine and supply chain disruptions caused by China's lockdowns. Central banks, mainly in the West, raised interest rates to curb inflation, but this led to turmoil in stock markets and foreign exchange markets. Uncertainty about the future of the global economy has increased and recession fears are rising.

In the semiconductor market, this uncertain economic situation dampened demand for semiconductors for some consumer electronics such as smartphones, personal computers, and televisions, but the ongoing digitalization of society supported strong demand for semiconductors overall. Notably, in addition to growing demand for semiconductors related to data centers and AI, demand for high-performance smartphone semiconductors such as those for 5G continued at a high level. Although moves to adjust inventories have been observed in some areas, there is still a strong awareness of shortages of semiconductors for automobiles and industrial equipment, and Advantest's customers continue to be highly willing to make capital investments.

As the shortage of semiconductors and other parts, and logistical disruptions in distribution networks, affect a broad range of supply chains, Advantest continues to face difficulties in terms of parts procurement. In this business environment, Advantest strove to improve our production system and stabilize procurement of parts, while also working to capture the expanding demand for semiconductor test equipment.

As a result of the above, net sales were (Y) 135.9 billion (40.0% increase in comparison to the corresponding period in the previous fiscal year), operating income was (Y) 44.8 billion (71.4% increase in comparison to the corresponding period in the previous fiscal year), income before income taxes was (Y) 48.4 billion (88.1% increase in comparison to the corresponding period in the previous fiscal year) and net income was (Y) 36.5 billion (88.7% increase in comparison to the corresponding period in the previous fiscal year). In addition to top-line sales growth boosted by yen depreciation vs the US dollar, highly profitable products took a more prominent role in our sales mix, pushing all the above figures to record quarterly highs. Average currency exchange rates in the period were 1 USD to 124 JPY (109 JPY in the corresponding period of the previous fiscal year), and 1 EUR to 134 JPY (131 JPY in the corresponding period of the previous fiscal year). The

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