Nichias : Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2022 (April 1, 2021 to December 31, 2021)

Consolidated Financial Results for the Third Quarter of the Fiscal Year

Ending March 31, 2022 (April 1, 2021 to December 31, 2021)

Company Name:	February 7, 2022
NICHIAS Corporation
Stock Exchange Listing:	Tokyo Stock Exchange (Code number 5393)
URL:	https://www.nichias.co.jp/nichias-E/
Representative:	Toshiyuki Takei, President and Chief Executive Officer
Inquiries:	Kiminori Nakata, Representative Director and Senior Managing Executive Officer
Phone:	[phone]

Scheduled date of filing of quarterly consolidated financial statements: February 10, 2022

Supplementary materials for financial results:

Available

Organization of financial results briefing:

None

Scheduled date of commencement of dividend payment:

－

(Fractional amounts of less than ¥1 million are discarded.)

1. Consolidated financial results for the third quarter of Fiscal Year 2021

(April 1, 2021 to December 31, 2021)

(1) Operating Results (cumulative)

(Percentages represent year-on-year changes)

Net sales

Operating income

Ordinary income

Profit attributable to

owners of the parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

FY2021 Q3

159,820

15.3

20,071

62.6

22,080

68.4

15,978

88.9

FY2020 Q3

138,671

(9.1)

12,345

(17.3)

13,112

(15.2)

8,458

(19.8)

Note: Comprehensive income FY2021 Q3 ¥18,894 million---(74.9)%;FY2020 Q3 ¥10,805 million---(5.4)%

Basic earnings per share

Diluted earnings per share

FY2021 Q3

Yen

Yen

240.88

－

FY2020 Q3

127.51

－

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

%

As of December 31, 2021

235,496

150,322

63.3

As of March 31, 2021

219,602

136,450

61.7

(Reference) Shareholders' equity

FY2021 Q3 ¥149,156 million; As of March 31, 2021 (FY2020) ¥135,429 million

2. Dividends

Annual Dividends

End of 1st quarter

End of 1st half

End of 3rd quarter

Year-end

Total

FY2020

Yen

Yen

Yen

Yen

Yen

－

38.00

－

40.00

78.00

FY2021

－

42.00

－

FY2021 (Forecast)

44.00

86.00

Note: Adjustments from the most recently released dividend forecast: Yes

*For details of the revisions to our dividend forecast, please see the "Notice of Revision to Dividend Forecast (Dividend Increase)" released separately today.

3. Forecast of consolidated financial results for Fiscal Year 2021 (April 1, 2021 to March 31, 2022)

						(Percentage figures represent changes from previous fiscal year)
	Net sales		Operating income	Ordinary income	Profit attributable to	Basic earnings
		owners of the parent	per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	215,500		9.7	26,000	32.5	28,000	31.6	19,000	77.3	286.43

Note: Adjustments from the most recently released consolidated results forecast: Yes

*For details of the revisions to our earnings forecasts, please see the "Notice of Revisions to Earnings Forecasts" released separately today.

*Notes

1. Changes in significant subsidiaries during the consolidated quarter under review: None
2. Application of specific accounting methods in the preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and restatements

1)	Changes in accounting policies due to revision of accounting standards:	Yes
2)	Changes other than those in 1) above:	None
3)	Changes in accounting estimates:	None
4) Restatements:	None

(4) Number of shares outstanding (ordinary shares)

1. Number of shares issued at the end of the period (including treasury stock)

FY2021 Q3 (As of December 31, 2021)	67,811,917 shares
FY2020	(As of March 31, 2021)	67,811,917 shares

1. Number of shares of treasury stock at the end of the period

FY2021 Q3 (As of December 31, 2021)	1,479,073 shares
FY2020	(As of March 31, 2021)	1,477,947 shares

1. Average number of shares outstanding during the period

FY2021 Q3	(As of December 31, 2021)	66,333,363 shares
FY2020 Q3	(As of December 31, 2020)	66,334,854 shares

*The consolidated financial results for the third quarter of the fiscal year ending March 31, 2022, are not subject to quarterly review by a certified public accountant or auditor.

*Information concerning proper use of financial forecasts and other special notes Information concerning forward-looking statements

Forward-looking statements concerning financial forecasts contained in these materials are based on information available to the Company when the forecasts were made and certain assumptions judged to be reasonable. However, the Company makes no guarantee that these forecasts will be achieved. Actual results may differ significantly from the forecasts due to a variety of factors.

Disclaimer: This is a Japanese-English translation of the summary of financial statements of the Company produced for your convenience. Since no auditor audited this report, officially only the Japanese version is assumed to be the summary of financial statements of the Company. This summary does not constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on these statements. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct.

Attachment index

1. Qualitative information on the quarter under review................................................................................................	2
(1)	Explanation of operating results ...................................................................................................................................................................	2
(2)	Explanation of financial position...................................................................................................................................................................	2
(3)	Explanation of information related to future prospects including consolidated results forecasts...................................	3
2. Consolidated financial statements and related notes ................................................................................................	4
(1)	Quarterly consolidated balance sheets ......................................................................................................................................................	4
(2)	Quarterly consolidated statements of income and consolidated statements of comprehensive income ....................	6
Quarterly consolidated statements of income ..............................................................................................................................................	6
Quarterly consolidated statement of comprehensive income................................................................................................................	7
(3)	Quarterly consolidated statements of cash flows..................................................................................................................................	8
(4)	Notes regarding quarterly consolidated financial statements ......................................................................................................	10
(Notes regarding going concern assumption) .......................................................................................................................................	10
(Notes regarding significant changes in shareholders' equity [if any]) .......................................................................................	10
(Changes in accounting policies) .................................................................................................................................................................	10
(Segment information) .....................................................................................................................................................................................	11
3. Supplementary Materials .............................................................................................................................................	12

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1. Qualitative information on the quarter under review

(1) Explanation of operating results

During the third quarter of the consolidated fiscal year, the recovery in the Japanese economy was soft despite a gradual easing of the severe conditions caused by the COVID-19 pandemic. In the manufacturing industry, the recovery in capital investment and production came to a standstill, and exports remained broadly flat. Overseas, the US economy recovered and emerging countries showed signs of improvement, but the pace of recovery in China slowed.

In these conditions, the Group's net sales rose 15.3% year on year to ¥159,820 million, due to high demand for products for semiconductor production equipment and a recovery in demand for auto parts to pre-COVID-19 levels.

In terms of profits, operating income rose 62.6% year on year to ¥20,071 million, ordinary income rose 68.4% year on year to ¥22,080 million, and profit attributable to owners of the parent rose 88.9% year on year to ¥15,978 million.

The Company adopted the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan Statement No. 29, March 31, 2020; hereinafter the "Accounting Standard for Revenue Recognition"), etc. from the start of the first quarter of the current consolidated fiscal year. As a result, compared with before the application of the standard, net sales in the third quarter of the fiscal year rose ¥4,216 million and operating income and ordinary income both increased by ¥544 million. For details, refer to "2. Consolidated financial statements and related notes (4) Notes regarding quarterly consolidated financial statements (Changes in accounting policies) and (Segment information) Segment information 2. Matters related to changes in reporting segments, etc."

Net sales by segment for the third quarter of the fiscal year are as follows:

Sales in the Energy and Industrial Plants Divisionrose 0.3% year on year to ¥42,880 million, primarily owing to changes in the method of revenue recognition related to construction contracts due to application of the Accounting Standard for Revenue Recognition, etc.

Sales in the Industrial Products Divisionincreased 11.3% year on year to ¥35,737 million owing to solid demand for fluororesin products and inorganic thermal insulation products driven by a recovery in the electronic components and semiconductor-related markets, and high demand for environmental products in the Chinese market.

Sales in the Advanced Products Divisionrose 52.6% year on year to ¥26,329 million, owing to strong demand for semiconductors.

Sales in the Autoparts Divisionrose 21.9% year on year to ¥33,384 million, as demand has been recovering in Japan and overseas since the third quarter of the previous fiscal year following a decline in the third quarter of fiscal year 2020 with the spread of COVID-19.

Sales in the Building Materials Divisionrose 12.1% year on year to ¥21,488 million due to an easing of the impact of the delay and postponement of construction projects due to the spread of the pandemic, and a recovery in demand for flooring business.

(2) Explanation of financial position

1) Assets, liabilities, and net assets

Total assets at the end of the third quarter of the consolidated fiscal year ending March 31, 2022, were ¥235,496 million, up ¥15,893 million compared with the end of the previous fiscal year. This was largely because cash and deposits rose by ¥4,681 million, electronically recorded monetary claims rose by ¥2,430 million, land rose by ¥2,154 million, raw materials and supplies rose by ¥2,105 million, and merchandise and finished goods rose by ¥2,069 million.

Liabilities at the end of the third quarter of the fiscal year ending March 31, 2022, were ¥85,174 million, up ¥2,022 million compared with the end of the previous fiscal year. This was largely because electronically recorded monetary obligations rose ¥1,431 million and deposits, etc. included in other current liabilities rose ¥1,338 million, while provision for bonuses fell ¥890 million.

Net assets at the end of the third quarter of the fiscal year ending March 31, 2022, were ¥150,322 million, up ¥13,871 million compared with the end of the previous fiscal year. This was largely due to increases of ¥10,967 million in retained earnings, ¥1,532 million in valuation difference on available-for-sale securities, and ¥1,157 million in foreign currency translation adjustment.

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2) Cash flows

Cash and cash equivalents at the end of the third quarter of the fiscal year ending March 31, 2022 (hereinafter, "cash"), increased by ¥4,476 million compared with the end of the previous fiscal year to ¥44,066 million. Cash flows and factors affecting cash flows are as follows:

(Net cash provided by [used in] operating activities)

Net cash provided by operating activities was ¥15,880 million (compared with receipts of ¥9,816 million in the same period of the previous fiscal year).

This was primarily because although cash decreased due to ¥6,945 million in income taxes paid and a ¥3,953 million increase in inventories, cash increased due to ¥22,138 million in income before income taxes, ¥4,833 million in depreciation & amortization, and a ¥1,164 million increase in notes and accounts payable - trade.

(Net cash provided by [used in] investing activities)

Net cash used in investing activities was ¥6,140 million (compared with expenditures of ¥4,425 million in the same period of the previous fiscal year). This mainly reflected an increase in cash due to ¥1,547 million in proceeds from liquidation of affiliated companies and a decrease in cash due to ¥7,250 million in expenditures for the acquisition of property, plant and equipment.

(Net cash provided by [used in] financing activities)

Net cash used in financing activities was ¥5,901 million (compared with expenditures of ¥5,520 million in the same period of the previous fiscal year).

This was because of a decrease in cash due to ¥5,411 million in cash dividends paid.

(3) Explanation of information related to future prospects including consolidated results forecasts

The full-year earnings forecasts for the fiscal year ending March 31, 2022, announced on October 18, 2021, have been revised, largely to reflect earnings progress in the third quarter of the consolidated fiscal year. For details, please see the "Notice of Revisions to Earnings Forecasts" released separately today.

The Company prepared these earnings forecasts based on the information available as of the day that these materials were released, and actual results could differ from forecasts depending on a variety of factors.

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