Arisawa Mfg : Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023 (Based on Japanese GAAP)（194KB）

Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023 (Based on Japanese GAAP)

Company Name:	Arisawa Mfg. Co., Ltd.	Stock exchange listing: Tokyo	November 9, 2023
Stock code:	5208	(URL https://www.arisawa.co.jp/)
Representative:	Representative Director and CEO:	Yuta Arisawa
Inquiries:	Director and Senior Managing Operating Officer:	Takeshi Masuda	Telephone: [phone]
Scheduled date to file quarterly securities report:	November 14, 2023
Scheduled date to commence dividend payments:	December 4, 2023
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing:	Yes (for analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023)

1. Consolidated Operating Results (Cumulative)

(Percentages indicate year-on-year changes)

			Net sales		Operating profit		Ordinary profit			Profit attributable to
							owners of parent
Six months ended	Millions of yen	%	Millions of yen		%	Millions of yen	△	%	Millions of yen	%
September 30, 2023		19,895	13.5	169		90.9				218	90.9	563	78.0
September 30, 2022		22,994	△ 5.7	1,861		△ 9.1			2,408	5.3	2,563	△46.8
						2023: 1,377 million yen (		54.1%)
(Note)	Comprehensive income:	For the six months ended September 30,		△		(67.0%)
			For the six months ended September 30, 2022: 3,003 million yen		△
			Earnings per share	Diluted earnings per share
Six months ended			Yen			Yen
September 30, 2023			17.02			17.00
September 30, 2022			77.37			77.23

1. Consolidated financial position

			Total assets		Net assets	Equity ratio	Net asset per share
	As of		Millions of yen	Millions of yen	%	Yen
	September 30, 2023		67,983	44,875	66.0	1,353.33
	March 31, 2023		67,659	47,107	69.5	1,422.43
	(Reference) Total equity: As	of September 30, 2023:	44,844 million yen
		As of March 31, 2023:	47,056 million yen

2. Cash dividends

				Annual dividend
		End of 1st quarter	End of 2nd quarter	End of 3rd quarter	End of year	Annual
		Yen	Yen	Yen	Yen	Yen
Year ended March 31, 2023	---	0.00	---	90.00	90.00
Year ending March 31, 2024	---	20.00
Year ending March 31, 2024			---	25.00	45.00
(Forecast)
(Note)	Existence of adjustment from the most recently announced dividend forecast: None

3. Forecast of consolidated financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

(Percentages indicate year-on-year changes)

	Net sales				Operating profit		Ordinary profit		Profit attributable to	Earnings
						owners of the parent	per share
	Millions of yen			%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
Full-Year	42,600			0.3	1,250		43.9	1,250		54.0	1,350		52.7	40.78
(Note) Revisions to projections of	consolidated financial results most recently announced: Yes	△			△
	△			△

For revisions to the full-year forecasts of consolidated financial results, please refer to the "Notice Concerning Differences Between Consolidated Financial Forecast and Actual Results for the Six Months Ended September 30, 2023, and Revisions to Full-Year Consolidated Financial Forecasts" disclosed today (November 9, 2023).

* Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the changes in

cope of consolidation): None
Newly included: --- (Company Name:	)
Excluded: ---	(Company Name:	)

1. Application of special accounting methods for preparing quarterly consolidated financial statements: Yes
2. Changes in accounting policies, changes in accounting estimates, and restatement
3. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
4. Number of issued shares (common shares)

1)	Total number of issued shares at the end	As of September	33,550,424	shares	Fiscal Year Ended	33,541,124	shares
	of the period (including treasury shares):	30, 2023:	March 31, 2023:
2)	Number of treasury shares at the end of	As of September	413,607	shares	Fiscal Year Ended	459,279	shares
	the period:	30, 2023:	March 31, 2023:
3)	Average number of shares during the	As of September			2Q of Fiscal Year
	period (cumulative from the beginning	33,104,555	shares	Ended March 31,	33,132,891	shares
	30, 2023:
	of the fiscal year):			2023:
(Note)	The shares of the Company (82,700 shares in	2Q of the year ended March 31, 2024 and	87,100 shares in the year ended March 31,
		2023) held by Custody Bank of Japan, Ltd. (Trust Account) as the trust assets of the "Employee Stock Ownership Plan" are included

in the number of treasury shares at the end of the period.

The shares of the Company held by Custody Bank of Japan, Ltd. (Trust Account) are included in the treasury shares to be deducted in calculation of the average number of shares during the year (84,498 shares in 2Q of the year ended March 31, 2024 and 88,392 shares in 2Q of the year ended March 31, 2023).

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Notes regarding the proper use of projections of the results and other matters
  Projections of results and future developments are based on information currently available to the Company and certain assumptions judged by the Company to be reasonable. Various factors could cause actual results to differ materially from these projections.

Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

Contents of Attached Materials
1. Qualitative Information Concerning Current Quarterly Closing Announcement	2
(1)	Explanation about Operating Results	2
(2)	Explanation about Financial Position	3
(3)	Explanation about Future Forecast Information,
	including Forecast of Consolidated Business Results	3
2. Quarterly Consolidated Financial Statements and Major Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income
	and Quarterly Consolidated Statements of Comprehensive Income	6
	Quarterly Consolidated Statements of Income
	Consolidated Cumulative Second Quarter	6
	Quarterly Consolidated Statement of Comprehensive Income
	Consolidated Cumulative Second Quarter	7
(3)	Quarterly Consolidated Cash Flows Statement	8
(4)	Notes to Quarterly Consolidated Financial Statements	10
	(Notes on Going Concern Assumption)	10
	(Notes in the Case of Significant Changes in Shareholders' Equity)	10
	(Application of Special Accounting Methods
	for Preparing Quarterly Consolidated Financial Statements)	10
	(Segment Information, etc.)	11
	(Significant Subsequent Events)	12

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

1. Qualitative Information Concerning Current Quarterly Closing Announcement

(1) Explanation about Operating Results

As for the Japanese economy in the current consolidated cumulative second quarter, the normalization of economic activity has progressed further as the COVID-19 infections have been subsiding. Meanwhile, looking overseas, the future prospects remained uncertain due to the persistent high energy and raw material prices caused by the prolonged situation in Ukraine, global monetary tightening in addition to the economic downturn in China, etc.

Under such circumstances, the operating results of our group for the current consolidated cumulative second quarter showed net sales of 19,895 million yen (a decrease of 13.5% year-on-year) due to a decrease in sales of electronic materials, which is the main business field, caused by the significant impact from the decrease in demand in the Chinese market, despite an increase in sales of industrial application structural materials. Due to soaring energy costs and raw material prices in addition to the impact of a decrease in sales, the results in terms of profit and loss are as follows: an operating profit was 169 million yen (a decrease of 90.9% year-on year); an ordinary profit was 218 million yen (a decrease of 90.9% year-on year); and a profit attributable to owners of parent was 563 million yen (a decrease of 78.0% year-on year).

Operating results with respect to each segment are as follows.

(Electronic materials)

Net sales were 11,725 million yen (a decrease of 23.8% year-on-year) due to a decrease in sales of flexible printed circuit board materials and glass cloth for printed circuit board, while segment loss was 209 million yen (the segment profit of 1,360million yen year-on-year) caused by the impact from soaring energy costs and raw material prices in addition to a decrease in sales.

(Industrial application structural materials)

Net sales were 5,101 million yen (an increase of 27.2% year-on-year) due to an increase in sales of water treatment FRP pressure vessels and honey-comb panel for aircraft, while the segment profit was 571 million yen (a decrease of 3.9% year-on-year).

(Electric insulation materials)

Net sales were 1,232 million yen (a decrease of 1.7% year-on-year) due to a decrease in infrastructure-related sales, while the segment profit was 113 million yen (an increase of 116.3% year-on-year).

(Display materials)

Net sales were 1,677 million yen (a decrease of 23.1% year-on-year) due to a decrease in sales of 3D-related materials and polarization control optical components, while the segment profit was 420 million yen (a decrease of 26.8% year-on-year).

(Other)

Net sales were 157 million yen (a decrease of 2.9% year-on-year).

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

(2) Explanation about Financial Position

Total assets as of the end of the current consolidated cumulative second quarter were 67,983 million yen, an increase of 323 million yen compared with the end of the previous fiscal year. This was largely due to an increase of 1,966 million yen in notes and accounts receivable - trade, and contract assets, an increase of 899 million yen in property, plant and equipment, a decrease of 1,749 million yen in cash and deposits, a decrease of 583 million yen in merchandise and finished goods, and a decrease of 537 million yen in investment securities, respectively.

Total liabilities were 23,108 million yen, an increase of 2,556 million yen compared with the end of the previous fiscal year. This was largely due to an increase of 1,031 million yen in notes and accounts payable - trade, and an increase of 1,171 million yen in long-term borrowings, respectively.

Total net assets were 44,875 million yen, a decrease of 2,232 million yen compared with the end of the previous fiscal year. This was largely due to an increase of 969 million yen in foreign currency translation adjustment and a decrease of 3,088 million yen in retained earnings, respectively.

(3) Explanation about Future Forecast Information, including Forecast of Consolidated Business Results

The Company has revised the consolidated financial forecasts for the fiscal year ending March 31, 2024 considering the recent performance trends. For more information, please refer to the "Notice Concerning Differences Between Consolidated Financial Forecast and Actual Results for the Six Months Ended September 30, 2023, and Revisions to Full-Year Consolidated Financial Forecasts" disclosed today (November 9, 2023).

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

2. Quarterly Consolidated Financial Statements and Major Notes

(1) Quarterly Consolidated Balance Sheet

			(Thousands of yen)
		Previous Consolidated	Current Consolidated
		Fiscal Year	Second Quarter
		(As of March 31, 2023)	(As of September 30, 2023)
Assets
Current assets
Cash and deposits	20,545,580	18,796,244
Notes and accounts receivable - trade, and	13,182,106	15,149,073
contract assets
Merchandise and finished goods	5,525,035	4,941,657
Work in process	2,373,079	2,509,608
Raw materials and supplies	4,263,762	4,951,128
Other	1,541,170	933,546
Allowance for doubtful accounts	△10,786	△45,788
Total current assets	47,419,946	47,235,470
Non-current assets
Property, plant and equipment	16,446,181	17,345,882
Intangible assets	244,197	227,823
Investments and other assets
Investment securities	2,545,474	2,007,765
Other	1,049,896	1,212,196
Allowance for doubtful accounts	△45,969	△45,617
Total investments and other assets	3,549,401	3,174,344
Total non-current assets	20,239,780	20,748,050
Total assets		67,659,726	67,983,520

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

			(Thousands of yen)
		Previous Consolidated	Current Consolidated
		Fiscal Year	Second Quarter
		(As of March 31, 2023)	(As of September 30, 2023)
Liabilities
Current liabilities
Notes and accounts payable-trade	5,213,263	6,244,757
Current portion of bonds payable	16,800	19,200
Short-term borrowings	5,056,253	5,223,031
Current portion of long-term borrowings	1,843,441	1,297,329
Income taxes payable	658,615	635,224
Provision for product warranties	42,184	38,409
Provision for bonuses	526,795	504,179
Provision for bonuses for directors (and	2,162	1,400
other officers)
Other	2,917,188	3,849,302
Total current liabilities	16,276,705	17,812,834
Non-current liabilities
Long-term borrowings	2,723,471	3,894,965
Provision for share awards	50,449	57,428
Retirement benefit liability	700,883	635,970
Asset retirement obligations	97,119	100,282
Other	703,383	606,826
Total non-current liabilities	4,275,306	5,295,474
Total liabilities	20,552,012	23,108,308
Net assets
Shareholders' equity
Share capital	7,847,873	7,853,189
Capital surplus	3,198,618	3,203,933
Retained earnings	34,293,471	31,205,178
Treasury shares	△512,975	△460,982
Total shareholders' equity	44,826,987	41,801,318
Accumulated other comprehensive income
Valuation difference on available-for-sale	466,417	282,699
securities
△13,657
Deferred gains or losses on hedges	－
Foreign currency translation adjustment	1,904,093	2,873,695
Remeasurements of defined benefit plans	△127,370	△112,723
Total accumulated other comprehensive	2,229,483	3,043,671
income
Share acquisition rights	51,243	30,221
Total net assets	47,107,714	44,875,211
Total liabilities and net assets		67,659,726	67,983,520

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

1. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income (Quarterly Consolidated Statements of Income)
   (Consolidated Cumulative Second Quarter)

			(Unit: thousand yen)
		Previous Consolidated	Current Consolidated
		Cumulative Second Quarter	Cumulative Second Quarter
		(From April 1, 2022	(From April 1, 2023
		to September 30, 2022)	to September 30, 2023)
Net sales	22,994,013	19,895,480
Cost of sales	18,292,178	16,998,186
Gross profit	4,701,835	2,897,293
Selling, general and administrative expenses	2,840,016	2,727,479
Operating profit	1,861,818	169,814
Non-operating income
Interest income	76,093	53,404
Dividend income	40,147	19,635
Foreign exchange gains	425,868	80,385
Other	164,122	76,025
Total non-operating income	706,232	229,451
Non-operating expenses
Interest expenses	65,189	92,406
Share of loss of entities accounted for using	－	43,023
equity method
Other	94,016	45,432
Total non-operating expenses	159,205	180,862
Ordinary profit	2,408,845	218,403
Extraordinary income
Gain on sale of non-current assets	461	781
Gain on sale of investment securities	1,305,241	656,042
Other	40,870	19,454
Total extraordinary income	1,346,572	676,277
Extraordinary losses
Loss on retirement of non-current assets	5,407	33,003
Impairment losses	11,813	6,557
Other	55,867	－
Total extraordinary losses	73,087	39,560
Profit before income taxes	3,682,330	855,120
Income taxes	1,116,339	291,676
Profit	2,565,990	563,444
Profit attributable to non-controlling interests	2,465	－
Profit attributable to owners of parent		2,563,524	563,444

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

(Quarterly Consolidated Statement of Comprehensive Income)

(Consolidated Cumulative Second Quarter)

		(Thousands of yen)
	Previous Consolidated	Current Consolidated
	Cumulative Second Quarter	Cumulative Second Quarter
	(From April 1, 2022	(From April 1, 2023
	to September 30, 2022)	to September 30, 2023)
Profit	2,565,990	563,444
Other comprehensive income
Valuation difference on available-for-sale	△819,279	△183,718
securities
Deferred gains or losses on hedges	△10,706	13,657
Foreign currency translation adjustment	1,240,050	978,884
Remeasurements of defined benefit plans, net of	2,885	14,646
tax
Share of other comprehensive income of entities	24,170	△9,282
accounted for using equity method
Total other comprehensive income	437,120	814,187
Comprehensive income	3,003,110	1,377,632
Comprehensive income attributable to
Comprehensive income attributable to owners	3,022,253	1,377,632
of parent
Comprehensive income attributable to non-	△19,142	－
controlling interests

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Arisawa Mfg. Co., Ltd. (5208) Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023

(3) Quarterly Consolidated Cash Flows Statement

			(Thousands of yen)
	Previous Consolidated	Current Consolidated
	Cumulative Second Quarter	Cumulative Second Quarter
	(From April 1, 2022	(From April 1, 2023
	to September 30, 2022)	to September 30, 2023)
Cash flows from operating activities
Profit before income taxes	3,682,330		855,120
Depreciation	1,097,498		1,104,523
Share-based payment expenses	18,577		21,999
Gain on reversal of share acquisition rights	△40,870		△19,454
Increase (△decrease) in allowance for doubtful	5,523		34,184
accounts
Increase (△ decrease) in provision for bonuses	232,003			△22,616
Increase (△ decrease) in provision for product	△44,999		△6,855
warranties
Increase (△ decrease) in provision for bonuses for	△3,095		△762
directors (and other officers)
Increase (△ decrease) in provision for share	△41,035	11,071
awards
Increase (△ decrease) in retirement benefit liability	△25,681		△43,837
Loss (△ gain) on redemption of investment	△40,063		－
securities
△116,241		△73,039
Interest and dividend income
Subsidy income	△9,652		△29,410
Interest expenses	65,189		92,406
Foreign exchange losses (△ gains)	△251,516		△151,210
Share of loss (△ profit) of entities accounted for	△29,194	43,023
using equity method
Loss (△ gain) on sale of short-term and long-term	△1,249,374		△656,042
investment securities
Loss (△ gain) on sale of non-current assets	△461		△781
Loss on retirement of property, plant and	213		1,682
equipment
Impairment losses	11,813		6,557
Loss on valuation of golf club membership	－	175
Decrease (△ increase) in trade receivables	△197,010		△1,538,621
Decrease (△ increase) in inventories	△1,813,237	90,251
Increase (△ decrease) in trade payables	1,465,803		890,233
Increase (△ decrease) in accrued consumption	△276,064	276,640
taxes
Decrease (△ increase) in other assets	△155,290	222,760
Increase (△ decrease) in other liabilities	106,252			△86,227
Subtotal	2,391,417		1,021,773
Interest and dividends received	176,560		99,527
Interest paid	△61,841		△90,679
Subsidies received	9,652		29,410
Income taxes refund (paid)	△955,899		△356,390
Net cash provided by (used in) operating activities	1,559,889			703,642

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