KITZ : Consolidated Financial Results for the Fiscal Year December 2021 (PDF 489KB)

Consolidated Financial Results for the Fiscal Year December 2021

(Japanese Accounting Standards)

This document has been prepared as a guide for non-Japanese investors and contains forward-looking statements that are based on managements' estimates, assumptions and projections at the time of publication. A number of factors could cause actual results to differ materially from expectations. This document is a translation of excerpts taken from the Japanese language original. All numbers are rounded down to the nearest until in accordance with standard Japanese practice. Please be advised that the Company cannot accept responsibility for investment decisions made based on the information contained in this report.

February 10, 2022

Company Name: KITZ CORPORATION

Stock Listing: Tokyo Stock Exchange Stock Code: 6498 URLhttps://www.kitz.co.jp/english/index.html President and Chief Executive Officer: Makoto Kohno

Inquiries: Kenichi Bessho, General Manager, Accounting Department Telephone: [phone]

Date of General Meeting of Shareholders (Planned): March 29, 2022 Date of Dividend Payment (Planned): March 11, 2022

Date of Financial Statement Filing (Planned): March 29, 2022

Availability of Financial Results Supplementary Presentation Materials: Yes Financial Results Presentation Meeting: Yes (For institutional investors and analysts)

(Figures of less than one million yen are rounded down to the nearest decimal)

1. Consolidated Financial Results (Jan. 1, 2021 - Dec. 31, 2021) (1) Consolidated Operating Results

(% figures represent year-over-year change)

Net Sales

Operating IncomeOrdinary Income

Net Income attributable to owners of the parent

％	Million yen	％	Million yen	％	Million yen	％
FY December 2021	135,790	-	8,990	-	8,975	-	4,954	-
FY December 2020	84,245	-	3,751	-	3,169	-	2,113	-
(Note) Comprehensive Income:

Million yen

¥7,384 million in FY Dec. 2021 (-%) ¥1,468 million in FY Dec. 2020 (-%)

Net Income per Share	Net Income per Share (Diluted)	Return on Equity	Ratio of Ordinary Income to Total Assets	Ratio of Operating Income to Net Sales
FY December 2021 FY December 2020	Yen 55.26 23.38	Yen ― ―	％ 6.4 2.8	％ 6.3 2.3	％ 6.6 4.5

(Reference) Gain from investments in subsidiaries and affiliates accounted for by the equity method: FY Dec. 2021: -

FY Dec. 2020: -

(Note) At the 106th Annual General Meeting of Shareholders held on June 29, 2020, the company changed our fiscal year-end from March 31 to December 31 in fiscal 2020, based the approval of the Partial Change in the Articles of Incorporation. Similar changes were made for consolidated subsidiaries whose fiscal year ends in March.

The fiscal year ended December 31, 2020, the transitional period for the change in the fiscal year-end, is the nine-month period from April 1, 2020 to December 31, 2020. Accordingly, year-on-year changes are not presented.

(2) Consolidated Financial Position

Total Assets	Net Assets	Equity Ratio	Net Assets per Share
FY December 2021 FY December 2020	Million Yen 143,419 140,681	Million Yen 81,253 75,167	% 56.0 52.8	Yen 896.55 828.76

(Reference) Equity: ¥80,369 million in FY Dec. 2021 (3) Consolidated Cash Flows

¥74,292 million in FY Dec. 2020

Net Cash Provided by Operating Activities	Net Cash Used in Investing Activities	Net Cash Provided by (Used in) Financing Activities	Cash and Cash Equivalents at End of Fiscal Year
FY December 2021 FY December 2020	Million Yen 8,280 10,024	Million Yen (3,236) (2,379)	Million Yen (11,527) 7,497	Million Yen 27,658 33,364

2. Dividends

Annual Dividend	Total Dividends from Surplus (Annual)	Payout Ratio (Consolidated)	Dividends to Net Assets Ratio (Consolidated)
1Q	2Q	3Q	4Q	Total
FY December 2020 FY December 2021	Yen ― ―	Yen 5.00 9.00	Yen ― ―	Yen 4.00 11.00	Yen 9.00 20.00	Million Yen 811 1,802	% 38.5 36.2	% 1.1 2.3
FY December 2022 (Planned)	―	11.00	―	14.00	25.00	35.6

3. Consolidated Financial Forecasts for the Fiscal Year December 2022 (Jan. 1, 2022-Dec. 31, 2022)

(% figures represent year-over-year change)

Net SalesOperating IncomeOrdinary Income

Net Income attributable to Net Income per owners of the parent

Share

2H FY December 2022 FY December 2022

％ 9.7 11.2

Million Yen 4,145 9,700

％ 4.7 8.1

Million Yen 2,700 6,300

％ 30.8 27.2

(Reference)

Adjusted year-on-year change of Consolidated Financial Results for the Fiscal Year December 2021 (Jan. 1, 2021-Dec. 31, 2021)

(% figures represent year-over-year change)

FY December 2021

Net Sales

Million Yen 135,790

％ 17.9

Million Yen 8,990

Operating IncomeOrdinary Income

Net Income attributable to owners of the parent

％ 68.7

Million Yen 8,975

％ 67.1

Million Yen 4,954

％ 47.2

The percentages shown above (adjusted year-on-year change) are the rates of increase or decrease based on the FY2020 consolidated results adjusted for the 12-month period (January 1, 2020 to December 31, 2020) and compared with the FY2021 consolidated results forecasts. Consolidated financial results for FY2020, adjusted for 12 months (January 1, 2020 to December 31, 2020), are not subject to audit procedures.

∗ Annotation

• (1) Changes in significant subsidiaries (Changes in subsidiaries affecting the scope of consolidation): None Newly consolidated: None

  Removed from consolidation: None

• (2) Changes in accounting methods, procedures and presentations concerning preparation of consolidated financial statements

  • 1. Changes accompanying revisions in accounting standards: None

  • 2. Other changes: None

  • 3. Changes in accounting estimates: None

  4. Redisplay of revisions: None

• (3) Number of shares outstanding (Common stock)

  • 1. Shares issued as of term end (including treasury stock):

  • 2. Treasury stock as of term end:

  • 3. Average during the term:

FY December 2021	90,396,511 shares	FY December 2020	90,396,511 shares
FY December 2021	753,976 shares	FY December 2020	753,057 shares
FY December 2021	89,643,016 shares	FY December 2020	90,397,812 shares

(Note) The shares held within the BIP trust accounts are included in term-end treasury stocks. (FY December 2021: 477,535 shares, FY December 2020: 477,535 shares)

Furthermore, the shares held within the BIP trust accounts are included in treasury stocks that are deducted in the calculation of the average number of shares for the period. (FY December 2021: 477,535 shares, FY December 2020: 493,594 shares)

(Reference) Fiscal Year December 2021 Non-Consolidated Financial Results (Jan. 1, 2021 - Dec. 31, 2021)

(1) Non-Consolidated Operating Results

(% figures represent year-over-year change)

Net Sales

Operating IncomeOrdinary Income

Net Income

FY December 2021

FY December 2020

Million yen 60,041 41,786

％

- -

Million yen 2,262 755

％

- -

Million yen 5,015 1,868

％

- -

Million yen 2,662 1,436

％

- -

Net Income per Share	Net Income per Share (Diluted)
FY December 2021 FY December 2020	Yen 29.70 15.89	Yen ― ―

(Note) The company changed our fiscal year-end from March 31 to December 31 in fiscal 2020. The fiscal year ended December 31, 2020, the transitional period for the change in the fiscal year-end, is the nine-month period from April 1, 2020 to December 31, 2020. Accordingly, year-on-year changes are not presented.

(2)Non-Consolidated Financial Position

Total Assets	Net Assets	Equity Ratio	Net Assets per Share
FY December 2021 FY December 2020	Million Yen 110,065 110,478	Million Yen 53,584 51,878	% 48.7 47.0	Yen 597.75 578.72

(Reference) Equity: ¥53,584 million in FY Dec. 2021

¥51,878 million in FY Dec. 2020

(Reference)

Adjusted year-on-year change of Non-Consolidated Financial Forecasts for the Fiscal Year December 2021 (Jan. 1, 2021-Dec. 31, 2021)

(% figures represent year-over-year change)

Net SalesOperating IncomeOrdinary Income

Net Income attributable to owners of the parent

FY December 2021

％ 70.2

Million Yen 5,015

％ 99.6

Million Yen 2,662

％ 95.7

The percentages shown above (adjusted year-on-year change) are the rates of increase or decrease based on the FY2020 non-consolidated results adjusted for the 12-month period (January 1, 2020 to December 31, 2020) and compared with the FY2021 non-consolidated results forecasts. Non-consolidated financial results for FY2020, adjusted for 12 months (January 1, 2020 to December 31, 2020), are not subject to audit procedures.

• ∗ This document is not subject to audit procedures.

• ∗ Explanations regarding the appropriate uses of our earnings projections and other information:

The future prospects of the business results, etc., described in this document are based on currently available information and certain premises that are judged to be rational at the time of writing, and are not intended as a guarantee that the Company will achieve these targets. Actual performance and other results may differ significantly due to various factors.

Investor presentation materials relating to our financial results are expected to be published on our corporate website on or after February 16, 2022.

1. Overview of results of operations

Beginning with the previous consolidated fiscal year (FY 2020), the Company has shifted the end of its fiscal period from March 31 to December 31. Because of this change, the previous consolidated fiscal year was the nine-month period from April 1 through December 31, 2020.

As a result, in comparison with the previous consolidated fiscal year, a comparison was conducted with (unaudited) reference figures calculated for the twelve-month period from January 1, 2020, through December 31, 2020, as the same period of the previous year.

(1) Overview of results of operations for the current period

(Reference: compared with the same period of the previous fiscal year)

(Units: Millions of yen)

The same period of the previous fiscal year	Current consolidated fiscal year	Changes	Percent change (%)
Net sales	115,138	135,790	20,651	17.9
Operating income	5,328	8,990	3,662	68.7
Ordinary income	5,372	8,975	3,602	67.1
Net income attributable to owners of the parent	3,366	4,954	1,588	47.2

During the current consolidated fiscal year, the global economy continued to be impacted by restrictions on economic activities in various countries due to COVID-19. Despite expectations of an economic recovery with increasing vaccinations, the prospects remained uncertain due to new concerns, such as the spread of variants. Severe conditions continued in the Japanese economy as well, as vaccinations progressed while measures for the reissuing of a state of emergency and the impact of an extension of measures to stop the spread of the virus led to restrictions on economic activities.

Under such an environment, for the current consolidated fiscal year, the valve manufacturing business achieved revenue growth because of the strength in products for semiconductor manufacturing facilities, as well as the effects of price revisions implemented in response to the rising prices of raw materials and an accompanying last-minute surge in demand. The brass bar manufacturing business also recorded revenue growth due to higher sale prices accompanying rising raw-material prices and to the increase in sales volumes. As a result, total net sales were up 17.9% YoY to ¥135,790 million.

A look at profit and loss shows that as a result of high profits in the valve manufacturing business due to revenue growth and in the brass bar manufacturing business due to both revenue growth and productivity improvements, operating income was up 68.7% YoY to ¥8,990 million. Ordinary income was up 67.1% YoY to ¥8,975 million, and net income attributable to owners of the parent was up 47.2% YoY to ¥4,954 million.

Each segment results are as follows:

(Units: Millions of yen)

External sales	Operating income (loss)
The same period of the previous fiscal year	Current consolidated fiscal year	Changes	Percent change (%)	The same period of the previous fiscal year	Current consolidated fiscal year	Changes	Percent change (%)
Valve manufacturing business	95,335	106,754	11,419	12.0	9,306	12,088	2,781	29.9
Brass bar manufacturing business	18,102	27,366	9,263	51.2	(184)	665	850	－
Others	1,699	1,668	(30)	(1.8)	(344)	(243)	101	－
Adjustments	－	－	－	－	(3,449)	(3,519)	(70)	－
Total	115,138	135,790	20,651	17.9	5,328	8,990	3,662	68.7

- Valve manufacturing business

External sales in the valve manufacturing business were up in the Japanese market due to strong performance in the semiconductor manufacturing equipment sector, as well as the effects of price revisions implemented in response to the rising prices of raw materials and an accompanying last-minute surge in demand. External sales in the overseas markets were down in the European markets, while up in the Chinese and Americas markets, centered on semiconductor manufacturing equipment. As a result, external sales were up 12.0% YoY to ¥106,754 million.

Operating income was up 29.9% YoY to ¥12,088 million partially due to increased income from the growth in sales in the semiconductor manufacturing equipment sector and the effects of cost reductions.

- Brass bar manufacturing business

External sales in the brass bar manufacturing business were up 51.2% YoY to ¥27,366 million due to increased sale prices accompanying the rising market prices of raw materials, which affected the market prices of products, and growth in sales volume.

Operating income totaled ¥665 million (vs. an operating loss of ¥184 million in the same period of the previous year) due to increased revenue and increased profits resulting from productivity improvements.

- Others

A look at other external sales shows that sales in the hotel business were down 1.8% YoY to ¥1,668 million due to such factors as decreased numbers of guests as a result of the reissue of a state of emergency in response to COVID-19. Operating loss amounted to ¥243 million (vs. an operating loss of ¥344 million in the same period of the previous year).

• (2) Overview of financial position for the current period

  Assets stood at ¥143,419 million, up ¥2,737 million from the end of the previous consolidated fiscal year, at the end of this consolidated fiscal year due to growth in notes and accounts receivable and inventories despite decreased cash and deposits for payment of short-term borrowings.

  Liabilities were down ¥3,348 million from the end of the previous consolidated fiscal year to ¥62,166 million due to factors that included decreased short-term borrowings resulting from their payment despite an increase in notes and accounts payable - trade.

  Net assets increased by ¥6,086 million from the end of the previous consolidated fiscal year to ¥81,253 million, reflecting such factors as the recording of ¥4,954 million in net income attributable to owners of the parent and increased translation adjustments.

• (3) Overview of cash flows for the current period

As of December 31, 2021, cash and cash equivalents (hereinafter referred to as "funds") amounted to ¥27,658 million, down ¥5,706 million compared with December 31, 2020.

The state and the reasons for the cash flow changes during the current consolidated fiscal year are outlined below.

The previous consolidated fiscal year, an irregular period due to the change in the fiscal period, was the nine- month period. Therefore, the comparison in cash flows with the previous consolidated fiscal year is not stated.

- Cash flows from operating activities

As a result of factors that included net income before income taxes and non-controlling interest of 7,705 million, depreciation of ¥6,685 million, an increase of ¥1,976 million in accounts payable, and the resulting increases of ¥5,357 million in notes and accounts receivable and ¥3,740 million in inventories, cash flows from operating activities resulted in an increase of ¥8,280 million.

- Cash flows from investing activities

Cash flows from investing activities resulted in a decrease of ¥3,236 million due to such factors as payments of ¥3,478 million for the purchase of property, plant, and equipment, mainly in the valve manufacturing business.

- Cash flows from financing activities

As a result of factors that included a net decrease of ¥8,934 million in short/long-term borrowings and payment of ¥1,171 million in dividends, cash flows from financing activities led to a decrease of ¥11,527 million.