Daishinku : Financial Results for the Year Ended March 31, 2023

DAISHINKU CORP.

FINANCIAL RESULTS

Tokyo, May 12, 2023 - Daishinku Corp. today announced its Financial Results for the Year ended March 31, 2023.

1. Operating Results for the years ended March 31, 2022 and 2023

(1) Consolidated operating results			(Figures in % are a comparisons with the same period of the previous year.)
	Net sales			Operating income	Ordinary income		Profit attributable to
				owners of parent
	Millions of Yen		%	Millions of Yen	%	Millions of Yen	%		Millions of Yen	%
Year ended March 31, 2023	38,430		(7.0)	4,210	(19.0)	5,106			(22.0)		3,208	(16.6)
Year ended March 31, 2022	41,306		24.5	5,194	148.7	6,547			158.5		3,848	214.6
Note: Comprehensive Income	Year ended March 31, 2023 ; 4,021 Yen-million, Year ended March 31, 2022 ; 7,537 Yen-million
	Net income per		Net income per share				Ordinary income to	Operating income to
		after adjustment with	Return on equity
	share				total assets		net sales
		potential shares
	Yen			Yen		%			%			%
Year ended March 31, 2023	99.41			-		9.3			6.2			11.0
Year ended March 31, 2022	119.21			-		12.6			8.7			12.6
ref. Investment Profit or Loss on Equity Method	As of March 31, 2023 ; -Yen-million, As of March 31, 2022 ; -Yen-million
Note: DAISHINKU CORP. has implemented the split of shares of common stocks at a ratio of four shares per one share effective as of November 1, 2021.
Accordingly, net income per-share is calculated on the assumption that the split of shares was implemented at the beginning of the previous fiscal year.
(2) Consolidated financial status
	Total assets			Net assets		Stockholders' equity ratio		Stockholders' equity
						per share
	Millions of Yen		Millions of Yen	%					Yen
As of March 31, 2023	83,622			43,182		42.9				1,112.24
As of March 31, 2022	81,317			40,231		40.7				1,026.09

ref. Stockholders' equity : As of March 31, 2023 ; 35,901 Yen-million, As of March 31, 2022 ; 33,121 Yen-million

Note: DAISHINKU CORP. has implemented the split of shares of common stocks at a ratio of four shares per one share effective as of November 1, 2021. Accordingly, stockholders' equity per-share is calculated on the assumption that the split of shares was implemented at the beginning of the previous fiscal year.

(3) Consolidated statements of cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	operating activities	investing activities	financing activities	equivalent at end
	Millions of Yen	Millions of Yen	Millions of Yen	Millions of Yen
Year ended March 31, 2023	5,859	(6,524)	1,298	18,437
Year ended March 31, 2022	8,762	(5,176)	382	18,516

2. Dividends

		Dividends per share		Total amount	Dividend payout	Dividend on
	End of	End of	End of	Year-end	Annual	of dividends	ratio	net assets
	1st quarter	2nd quarter	3rd quarter	(Full Year)	(Consolidated)	(Consolidated)
(Results)	Yen	Yen	Yen	Yen	Yen	Millions of Yen	%	%
Year ended March 31, 2022	-	25.00	-	12.00	-	589	15.3	1.9
Year ended March 31, 2023	-	14.00	-	14.00	28.00	903	28.2	2.6
(Forecast)
Year ending March 31, 2024	-	-	-	-	-		-

Note: DAISHINKU CORP. has implemented the split of shares of common stocks at a ratio of four shares per one share effective as of November 1, 2021. Accordingly, dividend until the 2nd quarter of the fiscal year ended March 2022 are actual dividend amounts prior to the share consolidation and the annual dividend for the fiscal year ended March 2022 is shown as " －". Without the split of shares, year-end dividend is 48.00 Yen and annual dividend is 73.00 Yen.

Dividends per share for the fiscal year ending March 2024 are undetermined as of the present time.

3. Forecast for the fiscal year ending March 31, 2024 (April 1, 2023 - March 31, 2024)

(Figures in % are a comparisons with the same period of the previous year.)

	Net sales		Operating income	Ordinary income	Profit attributable to	Net income
		owners of parent	per share
	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Yen
Year ending March 31, 2024	36,000	(6.3)	1,500	(64.4)	1,200	(76.5)	650	(79.7)	20.14

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• Others

1. Changes for important subsidiaries during this period : None
2. Changes in accounting policies and changes or restatement of accounting estimates

1.	Changes in accounting policies related to accounting standard revisions	None
2.	Other changes in accounting policies	None
3.	Changes in accounting estimates	None
4.	Modified restatements	None

1. Outstanding shares (Common shares)
   1. Number of shares outstanding (including treasury stock)

	As of March 31, 2023 :	36,196,968	shares	As of March 31, 2022:	36,196,968	shares
2.	Number of treasury stock
	As of March 31, 2023:	3,918,416	shares	As of March 31, 2022	:	3,917,336	shares
3.	Average number of shares during the period
	Year ended March 31, 2023 :	32,279,113 shares	Year ended March 31,	2022 :	32,280,506 shares

Note: DAISHINKU CORP. has implemented the split of shares of common stocks at a ratio of four shares per one share effective as of November 1, 2021. Accordingly, number of shares outstanding, number of treasury stock and average number of shares during the period are calculated on the assumption that the split of shares was implemented at the beginning of the previous fiscal year.

ref. Summary of Non-consolidated Financial Results

Non-consolidated Results for the years ended March 31, 2022 and 2023

(1) Non-consolidated operating results			(Figures in % are a comparisons with the same period of the previous year.)
	Net sales		Operating income		Ordinary income	Net income
	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%
Year ended March 31, 2023	30,651	(0.6)	2,754	29.1	4,107	6.8	3,059	(4.9)
Year ended March 31, 2022	30,851	27.8	2,134	861.5	3,845	221.6	3,216	267.0
			Net income per share
	Net income per share	after adjustment with
			potential shares
	Yen		Yen
Year ended March 31, 2023	94.78		-
Year ended March 31, 2022	99.65		-

Note: DAISHINKU CORP. has implemented the split of shares of common stocks at a ratio of four shares per one share effective as of November 1, 2021. Accordingly, net income per-share is calculated on the assumption that the split of shares was implemented at the beginning of the previous fiscal year.

(2) Non-Consolidated financial status

	Total assets	Net assets	Stockholders' equity ratio	Stockholders' equity
	per share
	Millions of Yen	Millions of Yen	%	Yen
As of March 31, 2023	60,957	32,772	53.8	1,015.31
As of March 31, 2022	59,768	30,534	51.1	945.93

ref. Stockholders' equity : As of March 31, 2023 ; 32,772 Yen-million, As of March 31, 2022 ; 30,534 Yen-million

Note: DAISHINKU CORP. has implemented the split of shares of common stocks at a ratio of four shares per one share effective as of November 1, 2021. Accordingly, stockholders' equity per-share is calculated on the assumption that the split of shares was implemented at the beginning of the previous fiscal year.

• The forecasts are based on assumptions of the future economic environment using the data available at the time of disclosure. Actual earnings may differ from the forecasts, due to a range of factors.

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Overview of operating results

1. Overview of operating results for the fiscal year ended March 31, 2023
   With regard to economic situation during the current fiscal year, an economy slowed down due to factors such as monetary policy measures against the progress of inflation in various country. In addition, the outlook remains uncertain due to exchange rate fluctuations, the shortage of semiconductors lingers and the energy supply risk problem.
   In such an environment, DAISHINKU CORP. saw an increase in sales in the automotive applications, due in part to the development of ADAS (Advanced Driver Assistance Systems). However, in the telecommunications field, demand of products for Chinese smartphones and communication modules was low, and in the consumer field, demand for telework/stay-at-home peaked out, resulting in net sales of 38,430 million yen (down 7.0% year on year). With regard to profits, operating income reached 4,210 million yen (down 19.0% year on year) due to the decrease in sales. The foreign exchange gain of 809 million yen was recorded as non-operating income, resulting in ordinary income of 5,106 million yen (down 22.0% year on year) and profit attributable to owners of parent of 3,208 million yen (down 16.6% year on year).
2. Overview of cash flows for the current fiscal year

The status of consolidated cash flows for the fiscal year ended March 31, 2023 is as follows: (Cash flows from operating activities)

Cash provided as a result of operating activities amounted to 5,859 million yen. This is mainly due to profit before income taxes.

(Cash flows from investing activities)

Cash used as a result of investing activities amounted to 6,524 million yen. This is mainly due to the purchase of property, plant and equipment.

(Cash flows from financing activities)

Cash obtained as a result of financing activities amounted to 1,298 million yen. This is mainly due to proceeds from long-term borrowings.

As a result, cash and cash equivalents at the end of the fiscal year ended March 31, 2023 decreased by 79 million yen from the end of the fiscal year ended March 31, 2022 to 18,437 million yen.

(Reference) Changes in cash-flow-related indicators

	Fiscal year	Fiscal year	Fiscal year	Fiscal year	Fiscal year
	ended March 31,	ended March 31,	ended March 31,	ended March 31,	ended March 31,
	2019	2020	2021	2022	2023
Equity ratio	43.6%	39.8%	40.6%	40.7%	42.9%
Market-value-based	14.7%	19.0%	29.1%	48.0%	28.1%
equity ratio
Cash flow to interest-	20.7 years	35.6 years	9.7 years	3.2 years	5.3 years
bearing debt ratio
Interest coverage ratio	7.8	5.7	23.7	66.7	28.0

1. Future outlook
   There are concerns about the future economic environment due to the continued tightening of monetary policies by respective countries to fight the ongoing inflation, the ever-surging prices of energy resources triggered by the war in Ukraine, and other geopolitical risks. It will likely take some time for economic activities to stabilize.
   In terms of the business environment surrounding our group, the communication market, including smartphones and wireless communication modules, and the consumer market, including PCs and peripherals, remain stagnant. It is also expected to take some time to address the semiconductor shortages in the in- vehicle market. The industrial market has also slowed down because of capital expenditure being restrained due to economic stagnation.
   In such a market environment, we aim to expand our business performance by reviewing our market portfolio while leveraging our original "Arkh series" and offering new product lineups, including "Mold type products" which apply the technology used in the "Arkh series." To this end, our group will open up the

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Indian market and increase our share in the industrial market in Europe, the data center market in the U.S., and the global electric vehicle market.

Regarding the long-term outlook, demand for timing devices will obviously grow mainly in "IoT," which requires wireless communication, including automated driving. To meet the ever-growing demand, we have reinforced our production equipment through the "Developing a Foundation Phase" in the First Midterm Business Plan, which ends this fiscal year, and have prepared for the "Establishing a Foundation Phase" in the Second Midterm Business Plan. We will continue to build a system for stably supplying timing devices, which are indispensable for a "connected society." We will also take on new challenges to realize carbon neutrality through CO2 capturing and separation from the viewpoint of reducing CO2 emissions, which increase in proportion to the production volume. We will endeavor to ensure "stable supply" and "environmental friendliness," which we consider as important issues, and create our new original value.

On a final note, the management vision of our group is "Honor 'human relationships' reflecting spirits that value 'Trust', the company motto and strive towards where all employees thrive." We believe that it is essential to create an environment and structure where all employees work with satisfaction and in a lively manner. We promote various efforts from the viewpoint of "motivating work" and "interesting work." We also place priority on instilling "integrity" and offer education on various occasions. Our ultimate goal is to enhance integrity on individual and organizational levels, build solid trust, and create "Team Daishinku" as a sustainable company based on a sense of unity.

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Consolidated Financial Statements

(1) Consolidated Balance Sheets

		(Unit: Thousands of yen)
	Year ended March 31, 2022	Year ended March 31, 2023
Assets
Current assets
Cash and deposits	18,516,683	18,517,098
Notes and accounts receivable - trade	9,940,268	9,514,449
Contract assets	204,417	173,175
Securities	-	39,854
Merchandise and finished goods	5,839,701	7,221,518
Work in process	4,976,962	5,292,225
Raw materials and supplies	5,716,907	4,660,821
Other	1,864,112	1,301,442
Allowance for doubtful accounts	(9,478)	(9,087)
Total current assets	47,049,574	46,711,499
Non-current assets
Property, plant and equipment
Buildings and structures, net	3,166,833	3,132,878
Machinery, equipment and vehicles, net	12,533,597	13,069,856
Tools, furniture and fixtures, net	969,135	1,150,322
Land	5,803,771	5,920,297
Leased assets, net	510,029	414,984
Construction in progress	4,701,569	6,896,838
Total property, plant and equipment	27,684,936	30,585,178
Intangible assets	569,853	1,184,714
Investments and other assets	3,276,853	2,812,160
Investment securities
Long-term loans receivable	1,548	1,285
Retirement benefit asset	720,102	678,734
Deferred tax assets	800,879	756,688
Other	1,241,887	919,991
Allowance for doubtful accounts	(27,800)	(27,800)
Total investments and other assets	6,013,470	5,141,060
Total non-current assets	34,268,259	36,910,953
Total assets	81,317,834	83,622,452

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