Alinco Incorporated : Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 20, 2022

Summary of Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending March 20, 2022

(Three Months Ended June 20, 2021)

		[Japanese GAAP]
		July 20, 2021
Company name:	ALINCO INCORPORATED	Listing: TSE 1st section
Stock code:	5933	URL: https://www.alinco.co.jp
Representative:	Nobuo Kobayashi, Representative Director and President, Chief Operating Officer
Contact:	Takashi Sakaguchi, Director, Managing Executive Officer,
	General Manager of Accounting and Control Division	Tel: [phone]

Scheduled date of filing of Quarterly Report:	August 3, 2021
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting:	None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 20, 2022 (March 21, 2021 - June 20, 2021)

(1) Consolidated results of operations				(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Three months ended Jun. 20, 2021	12,935	6.8	489	(5.6)	674	(8.7)	462	23.8
Three months ended Jun. 20, 2020	12,108	(11.5)	518	(35.7)	738	(12.0)	373	(21.9)

Note: Comprehensive income	Three months ended Jun. 20, 2021:	424 million yen	(up 85.2%)
	Three months ended Jun. 20, 2020:	229 million yen	(down 51.6%)
	Net income per share	Diluted net income	EBITDA
	per share
	Yen		Yen	Million yen	%
Three months ended Jun. 20, 2021	23.92		-		1,389	(4.5)
Three months ended Jun. 20, 2020	18.83		-		1,454	(12.9)

Note: EBITDA = Ordinary profit + Depreciation + Amortization of goodwill

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of Jun. 20, 2021	55,900	27,740	49.5	1,431.34
As of Mar. 20, 2021	55,443	27,679	49.8	1,428.84
Reference: Shareholders' equity	As of Jun. 20, 2021: 27,658 million yen	As of Mar. 20, 2021: 27,597 million yen

2. Dividends

			Dividend per share
	1Q-end	2Q-end		3Q-end		Year-end	Total
	Yen	Yen		Yen		Yen	Yen
Fiscal year ended Mar. 20, 2021	-	19.00		-		19.00	38.00
Fiscal year ending Mar. 20, 2022	-
Fiscal year ending Mar. 20, 2022 (forecast)		20.00		-		20.00	40.00

Note: Revision to the most recently announced dividend forecast: None

3. Consolidated Forecast for the Fiscal Year Ending March 20, 2022 (March 21, 2021 - March 20, 2022)

(Percentages represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per
		owners of parent		share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	27,290	8.3	1,400	43.5	1,490	32.5	1,010	67.6	52.29
Full year	56,030	5.0	2,990	17.0	3,080	7.2	2,010	20.8	104.06

Reference: EBITDA forecast for the fiscal year ending March 20, 2022 6,420 million yen (up 0.2%)

Note: Revision to the most recently announced consolidated forecast: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None

Newly added: -

Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting-based estimates, and restatements
3. 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
4. Number of shares outstanding (common shares)
5. 1. Number of shares outstanding at the end of the period (including treasury shares)

As of Jun. 20, 2021:	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 Jun. 20, 2021:	1,715,757 shares	As of Mar. 20, 2021:	1,724,357 shares
3) Average number of shares outstanding during the period
Three months ended Jun. 20, 2021: 19,320,344 shares	Three months ended Jun. 20, 2020: 19,827,910 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 (497,500 shares as of June 20, 2021) 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 (500,725 shares for the three months ended June 20, 2021).

*The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.

*Cautionary statement with respect to forward-looking statements and other special items

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 "Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 3 for forecast assumptions and notes of caution for usage.

ALINCO INCORPORATED (5933) Financial Results for the First Quarter of FY3/22

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Forecast and Other Forward-looking Statements	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
(3)	Notes to Quarterly Consolidated Financial Statements	8
	Going Concern Assumption	8
	Significant Changes in Shareholders' Equity	8
	Segment and Other Information	8

1

ALINCO INCORPORATED (5933) Financial Results for the First Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the first quarter, the COVID-19 pandemic continued to restrict economic activity in Japan. There are some positive signs, such as the level of ordinary profit in the manufacturing sector is much higher than before the pandemic according to the Financial Statements Statistics of Corporations by Industry. However, the appearance of the highly infectious delta variant, repeated restrictions to prevent infections and other measures make the economic outlook remains uncertain.

In the construction and housing related sectors, which are the primary industry of ALINCO group, there were indications of a recovery in the first quarter, such as the continuation of year-on-year growth in building construction starts based on floor area. In this kind of situation, our core business of scaffolding manufacture, sales and rental has exceeded the performance of the previous fiscal year because of strong sales of new ring lock ALBATROSS system ("ALBATROSS"), the main product in this business section. On the other hand, the sales growth of home fitness equipment has slowed down after the record sales during the pandemic in the previous fiscal year.

First quarter sales were 12,935 million yen, 6.8% higher than one year earlier, because of the recovery of sales in core business operations. Operating profit decreased 5.6% to 489 million yen and ordinary profit decreased 8.7% to 674 million yen due to the rising cost of steel products affected by the international commodity market prices, and the rising procurement cost from abroad as prices of raw materials and shipping cost increased. Profit attributable to owners of parent increased 23.8% to 462 million yen mainly because of extraordinary income from a gain on the partial sales of stock held for business relationships and a decrease in income taxes.

The performance for each business segment was as follows. Noted that, segment sales do not include intersegment sales.

First three months of FY3/22				(Millions of yen)
Segment	Net sales	Segment profit
Amount	YoY change (%)	Amount	YoY change (%)
Construction materials	4,720	28.7	375	52.1
Scaffolding material rental	3,784	1.5	127	(0.8)
Home equipment	3,545	(12.5)	14	(93.6)
Electronic equipment	884	33.7	35	-
Total for reportable segments	12,935	6.8	552	(1.6)
Adjustment	-	-	122	-
Amounts shown on quarterly	12,935	6.8	674	(8.7)
consolidated statement of income

Notes: 1. Segment profit is adjusted to be consistent with ordinary profit in the quarterly consolidated statement of income.

2. The adjustment to segment profit 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.

Construction materials

Sales increased 28.7% from one year earlier to 4,720 million yen. Sales of ALBATROSS increased by 121.6% because of sales to new customers, including a major construction company, and additional purchase from existing customers. Sales are expected to continue to increase during the remainder of this fiscal year. In addition, sales of racks for distribution warehouses are also remained strong.

The segment profit increased 52.1% from one year earlier to 375 million yen due to higher sales.

2

ALINCO INCORPORATED (5933) Financial Results for the First Quarter of FY3/22

Scaffolding material rental

Sales increased 1.5% from one year earlier to 3,784 million yen. The utilization rate of rental scaffolding materials for medium and high-rise buildings increased. There were also strong sales for event-related rental equipment, which has been significantly affected by the pandemic, associated with the Tokyo Olympics.

The segment profit was 127 million yen, about the same as in the first quarter of the previous fiscal year.

Home equipment

Sales decreased 12.5% from one year earlier to 3,545 million yen. Sales of aluminum ladders, stepladders and other products remained firm. However, sales of fitness equipment decreased due to record sales from the positive impact of stay-home demand one year earlier.

The segment profit decreased 93.6% to 14 million yen because of the decrease in sales and the rising procurement cost from abroad as prices of raw materials and shipping cost increased.

Electronic equipment

Sales increased 33.7% from one year earlier to 884 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, this business benefited from the recovery in demand for specified low-power wireless communication devices and wireless communication devices for business applications. And as a result, sales of wireless communication devices that support repeater and three-way simultaneous call were strong.

The segment profit made an improvement of 76 million yen from one year earlier to 35 million yen because of the sales growth.

(2) Explanation of Financial Position

Total assets increased 456 million yen from the end of the previous fiscal year to 55,900 million yen as of the end of the first quarter. Current assets increased 376 million yen to 33,561 million yen and non-current assets increased 79 million yen to 22,338 million yen. The main reason for the increase in total assets was an 841 million yen increase in inventories due to planned production.

Total liabilities increased 394 million yen from the end of the previous fiscal year to 28,159 million yen. Current liabilities increased 160 million yen to 16,320 million yen and non-current liabilities increased 234 million yen to 11,839 million yen. The main reason for the increase in liabilities was a 752 million yen increase in borrowings.

Total net assets increased 61 million yen from the end of the previous fiscal year to 27,740 million yen because of profit attributable to owners of parent of 462 million yen and dividend payments of 376 million yen.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

There are no revisions to the consolidated forecast for the fiscal year ending March 20, 2022 that was announced on April 30, 2021.

3