Hosiden : Financial Results for the First Six Months Ended September 30, 2023

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

November 10, 2023

Consolidated Financial Results

for the First Six Months Ended September 30, 2023

(Under Japanese GAAP)

Company name:	Hosiden Corporation
Listing:	Tokyo Stock Exchange
Securities code:	6804
URL:	https://www.hosiden.com/en/
Representative:	Kenji Furuhashi, President and CEO
Inquiries:	Takafumi Tsuru, Senior Executive Officer and General Manager of President Office
Telephone:	[phone]

Scheduled date to file quarterly securities report:	November 13, 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 institutional investors and
	securities analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the first 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	124,909	3.5	6,467	(36.3)	11,017	(31.4)	7,315	(33.1)
September 30, 2022	120,666	24.7	10,147	54.0	16,070	116.9	10,941	82.5
(Note) Comprehensive income	For the first six months ended September 30, 2023	10,157 million yen	[(19.1)%]
		For the first six months ended September 30, 2022	12,553 million yen	[91.5%]
	Basic earnings per	Diluted earnings per
		share		share
Six months ended			Yen		Yen
September 30, 2023			140.53		128.93
September 30, 2022			199.05		183.98

(2) Consolidated financial position

	Total assets	Net assets
As of	Millions of yen	Millions of yen
September 30, 2023	180,098	131,566
March 31, 2023	179,993	126,753
(Reference) Equity
As of September 30, 2023	131,566 million yen
As of March 31, 2023	126,753 million yen

Equity-to-asset ratio

%

73.1

70.4

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended	-	23.00	-	48.00	71.00
March 31, 2023
Fiscal year ending	-	24.00
March 31, 2024
Fiscal year ending			-	24.00	48.00
March 31, 2024
(Forecast)

(Note) Revision of cash dividend forecast most recently announced: None

3. Consolidated financial results forecasts for the fiscal year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

(Percentages indicate year-on-year changes.)

										Profit attributable to	Basic
	Net sales		Operating profit		Ordinary profit		earnings per
				owners of parent
											share
	Millions of		%	Millions of		%	Millions of		%	Millions of		%	Yen
	yen		yen		yen		yen
Full year	219,000	(21.0)	10,000	(36.5)	11,000	(42.1)	8,500	(32.7)	163.85

(Note) Revision of financial results forecast most recently announced: Yes

• Financial results forecasts are based on the assumption of a foreign exchange rate of 134 yen per U.S. dollar, and remain unchanged.
• For the revision of the financial results forecasts, please refer to the "Notice Regarding Differences Between Financial Results Forecasts and Actual Financial Results for the Six Months Ended September 30, 2023 and Revisions of Financial Results Forecasts for the Fiscal Year Ending March 31, 2024" published today, on November 10, 2023.

Notes

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

Newly included:	- companies (Company name)
Excluded:	- companies (Company name)

1. Application of specific accounting for preparing quarterly consolidated financial statements: None
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)
5. 1. Total number of issued shares at the end of the period (including treasury shares)

As of September 30, 2023

As of March 31, 2023

61,410,084 shares

63,010,084 shares

(ii) Number of treasury shares at the end of the period

As of September 30, 2023

As of March 31, 2023

9,715,178 shares

9,731,778 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended September 30, 2023

Six months ended September 30, 2022

52,057,425 shares

54,966,833 shares

Notes:1. Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.

2. Explanation on proper use of earnings forecasts, and other special matters

• For the revision of the financial results forecasts, please refer to the "Notice Regarding Differences Between Financial Results Forecasts and Actual Financial Results for the Six Months Ended September 30, 2023 and Revisions of Financial Results Forecasts for the Fiscal Year Ending March 31, 2024" published today, on November 10, 2023.
• The forward-looking statements about the future financial results of this document are future forecasts based on the judgment of Hosiden Corporation (the "Company") taking into account the information currently available, and the Company does not intend to make a warranty of their achievement. These forward-looking statements contain various potential risks and uncertainties, and actual results may be materially different from the forward-looking statements due to various material factors. Therefore, the Company asks not to depend highly on these forward-looking statements.

(Means of access to supplementary material on financial results)

The supplementary material on financial results for the first six months ended September 30, 2023, will be available on the Company's website.

Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

Contents of the attachment

Index

1. Qualitative information regarding financial results for the first six months ended September 30, 2023.. 2

(1)	Explanation of operating results	2
(2)	Explanation of financial position	2
(3)	Information regarding consolidated earnings forecasts and other forward-looking statements	3
2. Quarterly consolidated financial statements and significant notes thereto	4
(1)	Quarterly consolidated balance sheets	4
(2)	Quarterly consolidated statements of income and quarterly consolidated statements of
	comprehensive income	6
(3)	Quarterly consolidated statements of cash flows	8
(4)	Notes to quarterly consolidated financial statements	9
	Notes on going concern assumption	9
	Notes on significant changes in the amount of shareholders' equity	9
	Segment information, etc	9

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Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

1. Qualitative information regarding financial results for the first six months ended September 30, 2023

1. Explanation of operating results
   During the first six months of the fiscal year ending March 31, 2024 (from April 2023 to September 2023), the world economy recovered gradually. In China, stagnation in the real estate market is slowing economic growth, but the U.S. economy is trending strongly, supported by private consumption. In Japan, private consumption is strong, and inbound demand continues to recover. In terms of monetary policy, other countries are continuing their monetary tightening policies, and the Japanese yen has weakened due to differences in monetary policy. Meanwhile, geopolitical risks such as issues between Russia and Ukraine continue, adding a factor of uncertainty to the global economy.
   In the electronic component industry to which the Company group (the "Group") belongs, semiconductor shortages in the automotive-related market have eased and sales are recovering. In contrast, in the mobile communications-related market, while sales remain weak as consumers cut back on buying due to inflation, we are seeing a trend of recovery in certain emerging markets.
   Under such circumstances, the Group increased net sales as a whole. Specifically, net sales of the automotive-related business decreased, but the amusement-related and the mobile communications- related businesses both grew.
   Meanwhile, profits were boosted by the depreciation of the yen, but the impact of this factor was extremely large in the same period of the previous fiscal year, leading to decreases in operating profit, ordinary profit, and profit attributable to owners of parent.
   As a result, during the period under review, the Group posted consolidated net sales of 124,909 million yen (up 3.5% year on year), operating profit of 6,467 million yen (down 36.3% year on year), ordinary profit of 11,017 million yen (down 31.4% year on year) with foreign exchange gains of 4,113 million yen in line with foreign exchange fluctuations, and profit attributable to owners of parent of 7,315 million yen (down 33.1% year on year).
   The net sales and segment profit or loss for the reportable segments are as follows:
   Net sales for the electro-mechanical components segment was 108,659 million yen (up 2.3% year on year) due to increases in the amusement-related and mobile communications-related businesses, and segment profit was 4,576 million yen (down 50.9% year on year).
   Net sales for the acoustic components segment was 9,315 million yen (up 13.9% year on year) due to an increase in the automotive-related business and the AV equipment-related business while the segment profit was 700 million yen (up 9.3% year on year).
   Net sales for the display components segment was 1,257 million yen (down 52.8% year on year) due to a decrease in the automotive-related business, and the segment loss was 193 million yen (segment loss of 343 million yen for the previous year).
   Net sales for the applied equipment and other segment was 5,677 million yen (up 56.2% year on year) due to increases in the amusement-related and home appliances-related businesses, and the segment profit was 1,383 million yen (up 160.2% year on year).
2. Explanation of financial position Assets, liabilities, and net assets
   At the end of the second quarter of the fiscal year ending March 31, 2024, total assets increased 105 million yen from the end of the previous fiscal year to 180,098 million yen mainly due to increases in cash and deposits and trade receivables despite a decrease in securities. Total liabilities decreased 4,708 million yen from the end of the previous fiscal year to 48,531 million yen mainly due to a decrease in trade payables and repayments of short-term borrowings.
   Net assets increased 4,813 million yen from the end of the previous fiscal year to 131,566 million yen mainly due to increases in retained earnings and foreign currency translation adjustment, resulting in an equity-to-asset ratio of 73.1%.
3. • 2 -

Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

Cash flows

At the end of the quarter under review, cash and cash equivalents decreased 1,827 million yen from the end of the previous fiscal year to 64,189 million yen.

Net cash provided by operating activities in the period under review was 5,657 million yen. This was mainly due to profit before income taxes of 11,010 million yen, a decrease in inventories of 2,554 million yen, a decrease in trade payables of 5,076 million yen, and income taxes paid of 3,737 million yen.

Net cash used in investing activities was 1,147 million yen. This was mainly due to purchase of property, plant and equipment of 867 million yen.

Net cash used in financing activities was 6,610 million yen. This was mainly due to a decrease in short- term borrowings of 1,164 million yen, the purchase of treasury shares of 2,816 million yen, and dividends paid of 2,557 million yen.

1. Information regarding consolidated earnings forecasts and other forward-looking statements
   For revisions of financial results forecasts, please refer to "Notice Regarding Differences Between Financial Results Forecasts and Actual Financial Results for the Six Months Ended September 30, 2023 and Revisions of Financial Results Forecasts for the Fiscal Year Ending March 31, 2024" released on November 10, 2023. These financial results forecasts are based on the existing assumption of a foreign exchange rate of 134 yen per U.S. dollar.

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Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

2. Quarterly consolidated financial statements and significant notes thereto

(1) Quarterly consolidated balance sheets

			(Millions of yen)
		As of March 31, 2023	As of September 30, 2023
Assets
Current assets
Cash and deposits	57,418	58,934
Notes and accounts receivable - trade, and contract	34,970	36,550
assets
Securities	13,335	10,730
Merchandise and finished goods	9,691	9,612
Work in process	5,107	3,287
Raw materials and supplies	26,469	27,113
Other	4,913	4,860
Allowance for doubtful accounts	(27)	(26)
Total current assets	151,878	151,063
Non-current assets
Property, plant and equipment	17,495	17,675
Intangible assets	423	456
Investments and other assets
Investment securities	5,643	6,333
Other	4,839	4,856
Allowance for doubtful accounts	(287)	(286)
Total investments and other assets	10,195	10,902
Total non-current assets	28,114	29,034
Total assets		179,993	180,098

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Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

			(Millions of yen)
		As of March 31, 2023	As of September 30, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade	25,772	21,435
Short-term borrowings	2,189	1,050
Income taxes payable	3,910	3,988
Other	6,048	6,304
Total current liabilities	37,919	32,778
Non-current liabilities
Bonds with share acquisition rights	10,030	10,019
Retirement benefit liability	3,170	3,128
Other	2,118	2,604
Total non-current liabilities	15,319	15,752
Total liabilities	53,239	48,531
Net assets
Shareholders' equity
Share capital	13,660	13,660
Capital surplus	19,596	19,596
Retained earnings	100,808	103,668
Treasury shares	(10,695)	(11,584)
Total shareholders' equity	123,370	125,342
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	2,381	2,971
Foreign currency translation adjustment	666	2,994
Remeasurements of defined benefit plans	334	259
Total accumulated other comprehensive income	3,382	6,224
Total net assets	126,753	131,566
Total liabilities and net assets		179,993	180,098

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Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

1. Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income

Quarterly consolidated statements of income

			(Millions of yen)
		Six months ended	Six months ended
		September 30, 2022	September 30, 2023
Net sales	120,666	124,909
Cost of sales	105,490	113,607
Gross profit	15,175	11,302
Selling, general and administrative expenses	5,028	4,835
Operating profit	10,147	6,467
Non-operating income
Interest income	107	323
Dividend income	73	70
Foreign exchange gains	5,565	4,113
Other	198	83
Total non-operating income	5,945	4,591
Non-operating expenses
Interest expenses	10	28
Commission for syndicated loans	8	-
Other	2	13
Total non-operating expenses	22	41
Ordinary profit	16,070	11,017
Extraordinary income
Gain on sale of non-current assets	94	3
Total extraordinary income	94	3
Extraordinary losses
Loss on sale and retirement of non-current assets	5	10
Loss on liquidation of subsidiaries	220	-
Total extraordinary losses	226	10
Profit before income taxes	15,938	11,010
Income taxes - current	4,865	3,481
Income taxes - deferred	131	213
Total income taxes	4,997	3,695
Profit	10,941	7,315
Profit attributable to non-controlling interests	-	-
Profit attributable to owners of parent		10,941	7,315

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Hosiden Corporation (6804) Consolidated Financial Results for the First Six Months Ended September 30, 2023

Quarterly consolidated statements of comprehensive income

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2022	September 30, 2023
Profit	10,941	7,315
Other comprehensive income
Valuation difference on available-for-sale securities	(316)	589
Foreign currency translation adjustment	1,997	2,328
Remeasurements of defined benefit plans, net of tax	(69)	(75)
Total other comprehensive income	1,612	2,842
Comprehensive income	12,553	10,157
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	12,553	10,157
Comprehensive income attributable to non-controlling	-	-
interests

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