Marumae : Financial Results Summary for Q2 FY2022

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.

Summary of Financial Results for the Six Months Ended

February 28, 2022 (Japanese GAAP) (Non-consolidated)

March 30, 2022

Name of Listed Company:	Marumae Co., Ltd.	Stock Exchange Listing: Tokyo
Security Code:	6264
URL:	https://www.marumae.com/en/
Representative:	Toshikazu Maeda, President and Representative Director
Contact:	Takeshi Shimomai, General Manager of the Administration Headquarters
Email:[e-mail]

Scheduled date for submission of the quarterly report: April 13, 2022

Scheduled start date of dividend payment: April 21, 2022

Preparation of supplementary materials for the quarterly financial results: Yes

Quarterly earnings release conference: Yes (for institutional investors)

Note: Amounts are rounded down to the nearest million yen.

1.

Financial Results for the Six Months Ended February 28, 2022 (September 1, 2021 to February 28, 2022)

(1)

Operating Results (Cumulative)

Note: Percentages indicate changes from the same period of the previous fiscal year.

Six months endedFebruary 28, 2021

February 28, 2022

%	%
Net sales (Millions of yen)	2,299	13.9	3,962	72.3
Operating profit (Millions of yen)	424	16.2	1,175	177.1
Ordinary profit (Millions of yen)	422	23.7	1,171	177.2
Profit (Millions of yen)	294	23.9	837	184.3
Earnings per share of common stock (Yen)
Basic	23.01	65.40
Diluted	-	-

Note: From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the "Accounting

Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. Figures for the second quarter of the fiscal year ending August 31, 2022 include the effects of the new standards. However, the percentages of changes from the same period of the previous fiscal year are calculated based on the financial results for the same period of the previous fiscal year prior to the application of the standards, as their impact is immaterial.

(2)Financial Position

As of

August 31, 2021

February 28, 2022

Total assets (Millions of yen)	9,742	11,827
Net assets (Millions of yen)	6,327	7,001
Equity ratio (%)	64.9	59.2

Reference:Equity:

7,001 million yen (as of February 28, 2022)

6,327 million yen (as of August 31, 2021)Note: From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the "Accounting Standard

for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. Figures for the second quarter of the fiscal year ending

August 31, 2022 include the effects of the new standards.

• 2. Dividends

  Fiscal year ended

  Fiscal year endingAugust 31, 2021

  August 31, 2022

  1Q-end dividends per share (Yen)	-	-
  2Q-end dividends per share (Yen)	10.00	22.00
  3Q-end dividends per share (Yen)	-	- (Forecast)
  Year-end dividends per share (Yen)	14.00	22.00 (Forecast)
  Annual dividends per share (Yen)	24.00	44.00 (Forecast)
  Note: Revision to the most recently announced dividends forecast: None

• 3. Financial Forecasts for the Fiscal Year Ending August 31, 2022 (September 1, 2021 to August 31, 2022)

  Note: Percentages indicate changes from the corresponding period of the previous fiscal year.
  Fiscal year ending
  August 31, 2022
  %
  Net sales (Millions of yen)	7,200	34.1
  Operating profit (Millions of yen)	1,800	49.1
  Ordinary profit (Millions of yen)	1,780	48.3
  Profit (Millions of yen)	1,245	38.0
  Earnings per share (Yen)	97.30
  Note: Revision to the most recently announced financial forecasts: None

  From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. The financial forecasts presented above include the effects of the new standards. However, the percentages of changes from the corresponding period of the previous fiscal year are calculated based on the financial results for the same period of the previous fiscal year prior to the application of the standards, as their impact is immaterial.

Notes:

• (1) Adoption of special accounting methods for preparation of quarterly financial statements: None

• (2) Changes in accounting policies, changes in accounting estimates and restatements

  • 1. Changes in accounting policies along with changes in the accounting standards: Yes

  • 2. Changes in accounting policies, other than those included in 1. above: None

  • 3. Change in accounting estimates: None

  • 4. Restatements: None

  Note: For further information, please refer to "2. Quarterly Financial Statements and Primary Notes, (4) Notes to the Quarterly

  Financial Statements, Changes in accounting policies" on page 10.

• (3) Number of shares issued and outstanding (common stock)

  1. Number of shares issued and outstanding (including treasury shares)

  As of February 28, 2022:	13,053,000 shares
  As of August 31, 2021:	13,053,000 shares
  As of February 28, 2022:	244,624 shares
  As of August 31, 2021:	250,196 shares
  Six months ended February 28, 2022:	12,804,414 shares
  Six months ended February 28, 2021:	12,802,804 shares
  * Status of implementation of quarterly review procedures

  2. Number of shares of treasury shares

  3. Average number of shares outstanding (cumulative quarterly period)

This Summary of Financial Results is exempt from the quarterly review by certified public accountants or audit firms.

* Explanation regarding the appropriate use of financial forecasts and other notes

The financial forecasts and other forward-looking statements presented in this Summary of Financial Results are based on information available to the Company at the time of the issuance of this report, and certain assumptions that the Company judges to be reasonable.

Actual financial results may differ significantly due to various factors. Please refer to "1. Qualitative Information on Quarterly Financial

Results, (3) Description of Financial Estimates Information such as Financial Forecasts" on page 4 for the assumptions underlying the financial forecasts and other notes on their use.

Contents

• 1. Qualitative Information on Quarterly Financial Results................................................................. 2

  (1) Description of Operating Results.............................................................................................. 2

  (2) Description of Financial Position .............................................................................................. 3

  (3) Description of Financial Estimates Information such as Financial Forecasts ..................... 4

• 2. Quarterly Financial Statements and Primary Notes ........................................................................ 5

  • (1) Quarterly Balance Sheet ............................................................................................................. 5

  • (2) Quarterly Statement of Income .................................................................................................. 7

  • (3) Quarterly Statement of Cash Flows ........................................................................................... 8

  • (4) Notes to the Quarterly Financial Statements ......................................................................... 10

1. Qualitative Information on Quarterly Financial Results

From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the "Accounting Standard for

Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. Comparisons with the same period of the previous fiscal year in the description of operating results, and comparisons with the end of the previous fiscal year in the description of the financial position, are based on figures for the same period of the previous fiscal year and at the end of the previous fiscal year prior to the application of the standard, as its impact is immaterial.

For further information, please refer to "2. Quarterly Financial Statements and Primary Notes, (4) Notes to the Quarterly Financial

Statements, Changes in accounting policies."

(1) Description of Operating Results

During the six months ended February 28, 2022, in the Japanese economy, capital investment showed signs of picking up, although the impact of COVID-19 remained severe.

In the semiconductor sector, which is our main sales sector, against the backdrop of the global semiconductor shortage, demand expanded, especially for logic devices, with business activity reaching a record high. In the flat panel display (FPD) sector, the market recovered from the stagnation of the previous fiscal term. Although it is still at a low level compared to the previous peak, investment in the small- and medium-sized organic light-emitting diodes (OLEDs) for the Chinese market and investment in Generation 10.5 LCD panels were generally favorable. In the other sectors, the renewable energy field was re-evaluated worldwide.

Under these economic conditions, business in the semiconductor sector remained strong due to increased orders from new customers in addition to a rise in orders from existing customers. The FPD sector remained solid against the market environment due to an increase in orders for products manufactured with a large-scale electronic beam welder (EBW) and for new product types from new customers.

Furthermore, in the other sectors, orders for solar cell production equipment rose.

Regarding expenses, while net sales escalated, the ratio of fixed costs and expenses to production costs remained low compared to our initial forecast, resulting in reduced costs. However, due to a large backlog of orders, ongoing capital investment, and higher hourly rates resulting from rapid hiring of human resources, there was an increased provision for loss on orders received and inventory write-down for some unprofitable products included in the order backlog already received but not yet inspected.

As a result, the operating results for the six months ended February 28, 2022 comprises net sales of 3,962 million yen (year-on-year growth of 72.3%), operating profit of 1,175 million yen (year-on-year growth of 177.1%), ordinary profit of 1,171 million yen (year-on-year growth of 177.2%), and quarterly net profit of 837 million yen (year-on-year growth of 184.3%).

Since the Company has only one segment, the precision parts business, a description by segment is omitted.

The operating results of the precision parts business by sales sector are described below.

The Semiconductor Sector

In the semiconductor sector, orders received increased by 87.7% year-on-year to 3,731 million yen, and net sales rose by 60.2% year-on-year to 2,996 million yen. Please note that figures for orders received include materials supplied for a fee.

The FPD Sector

In the FPD sector, orders received increased by 157.0% year-on-year to 1,014 million yen, and net sales climbed by 183.4% year-on-year to 781 million yen.