Sohgo Security Services : Summary of Financial Results for the First Quarter Ended June 30, 2022

Consolidated Financial Results for the First Quarter Ended June 30, 2022

Prepared in Conformity with Accounting Principles Generally Accepted in Japan (Japanese GAAP)

English Translation of the Original Japanese-Language Report

SOHGO SECURITY SERVICES CO., LTD.	(Code No.2331, TSE Prime Market)
URL https://www.alsok.co.jp/en/ir/index.html
Representative:	Ikuji Kayaki, Representative Director Group COO
Financial and accounting:	Koji Kishimoto, Director and Senior Executive Officer	(Phone: [phone])

1. Summary of the consolidated financial results for the first quarter ended June 30, 2022 (April 1, 2022 - June 30, 2022)

(1) Consolidated operating results				(Figures rounded down to the nearest million)
	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Three months ended
June 30, 2022	114,008		(2.6)	7,182	(26.4)	7,878	(21.5)	4,454	(27.0)
June 30, 2021	117,012		6.2	9,759	32.3	10,037	31.0	6,098	35.4

Note 1: Percentage shown in net sales, operating income, ordinary income, and profit attributable to owners of parent above represent the changes from the previous fiscal year.

Note 2:

Comprehensive income Three months ended June 30, 2022

¥ 5,656 million

(11.2%)

Three months ended June 30, 2021

¥ 6,372 million

4.9%

Net income per share

Diluted net income per share

Three months ended

Yen

Yen

June 30, 2022

44.00

-

June 30, 2021

60.24

-

(2) Consolidated financial conditions

Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

Three months ended

498,196

327,964

60.4

2,971.12

June 30, 2022

Fiscal year ended

488,278

327,509

61.5

2,964.85

March 31, 2022

Reference:

Equity capital

Three months ended June 30, 2022

¥ 300,781 million

Year ended March 31, 2022

¥ 300,147 million

2. Dividend

Dividends per share

End of 1Q

End of 2Q

End of 3Q

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

March 31, 2022

-

38.00

-

44.00

82.00

March 31, 2023

-

Fiscal year ending

43.00

-

43.00

86.00

March 31, 2023(Forecast)

Note:

Revisions to the dividend forecast in this quarter: No

3. Forecasts for the consolidated financial results for the fiscal year ending March 31, 2023 (April 1, 2022 - March 31, 2023) (Figures rounded down to the nearest million)

		Net sales		Operating income	Ordinary income	Profit attributable to	Net income per
			owners of parent	share
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Interim		245,300	0.0	19,500	(21.5)	20,000	(22.3)	12,000	(25.5)	118.53
Annual		510,000	4.3	45,300	5.7	47,000	4.9	29,900	3.2	295.35
Note :	Revisions to the forecast of financial results in this quarter: No

4. Others

1. Changes in consolidated subsidiaries (Changes in scope of consolidation) : No

Added:

-

Removed:

-

1. Application of accounting which is simplified or exceptional for quarterly consolidated financial statements: Yes
2. Changes in accounting policies, changes in accounting estimates, and restatement

a Changes arising from revision of accounting standards	: Yes
b Changes arising from other factors	: No
c Changes arising from accounting estimate	: No
d Restatement	: No

(4) Number of shares outstanding (Ordinary shares)

a Number of shares issued	Three months ended	102,040,042 shares	Year ended	102,040,042 shares
(including treasury stock)	June 30, 2022		March 31, 2022
b Number of shares of treasury stock	Three months ended	805,116 shares	Year ended	804,851 shares
	June 30, 2022	March 31, 2022
c Average number of ordinary shares	Three months ended	101,234,933 shares	Three months ended	101,234,989 shares
throughout the fiscal year	June 30, 2022		June 30, 2021

• This summary of financial results is exempt from quarterly review procedures.
• Explanation for Appropriate Use of Forecasts and Other Notes

The forward-looking statements such as operational forecasts contained in this summary of financial results are based on the information currently available to the Company and certain assumptions which are regarded as legitimate, and the Company does not promise the achievement of these results. Actual results may differ significantly from these forecasts due to various factors.

Consolidated Balance Sheets			(Millions of yen)
				As of March 31, 2022	As of June 30, 2022
	Assets
	Current assets
	Cash and deposits	71,357	59,784
	Cash for Transportation Security Services	76,768	74,541
	Notes and accounts receivable - trade, and	56,458	52,038
	contract assets
	Securities	380	633
	Raw materials and supplies	7,509	8,045
	Costs on uncompleted construction contracts	222	328
	Advances paid	6,892	6,435
	Other	14,424	19,758
	Allowance for doubtful accounts	(140)	(144)
	Total current assets
	233,872	221,421
	Noncurrent assets
	Property, plant and equipment	103,376	113,467
	Intangible assets
	Goodwill	27,097	36,274
	Other	12,650	12,402
	Total intangible assets
	39,747	48,677
	Investments and other assets
	Investment securities	56,148	55,925
	Other	55,562	59,139
	Allowance for doubtful accounts	(429)	(434)
	Total investments and other assets
	111,281	114,629
	Total noncurrent assets
	254,405	276,774
	Total assets
	488,278	498,196
Liabilities
	Current liabilities
	Notes and accounts payable-trade	23,098	18,920
	Short-term loans payable	11,278	14,076
	Income taxes payable	6,751	1,560
	Provision	2,164	1,200
	Other	47,091	61,791
	Total current liabilities
	90,384	97,548
	Noncurrent liabilities
	Long-term loans payable	2,145	2,090
	Retirement benefit liability	27,175	27,443
	Provisions	1,597	1,608
	Asset retirement obligations	486	811
	Other	38,977	40,729
	Total noncurrent liabilities
	70,383	72,683
	Total liabilities
	160,768	170,232

Consolidated Balance Sheets		(Millions of yen)
			As of March 31, 2022	As of June 30, 2022
	Net assets
	Shareholders' equity
	Capital stock	18,675	18,675
	Capital surplus	34,129	33,940
	Retained earnings	241,718	241,719
	Treasury stock	(1,072)	(1,072)
	Total shareholders' equity
	293,450	293,262
	Accumulated other comprehensive income
	Valuation difference on	6,917	7,304
	available-for-sale securities
	Revaluation reserve for land	(3,378)	(3,380)
	Foreign currency translation adjustment	321	707
	Remeasurements of defined benefit plans	2,836	2,887
	Total accumulated other comprehensive income
	6,696	7,518
	Minority interests
	27,362	27,183
	Total net assets
	327,509	327,964
	Total liabilities and net assets
	488,278	498,196

Consolidated Statements of Income		(Millions of yen)
			Three months ended	Three months ended
			June 30, 2021	June 30, 2022
	Net sales	117,012	114,008
	Cost of sales	87,383	85,520
	Gross profit
	29,629	28,488
	Selling, general and administrative expenses
	19,869	21,306
	Operating income
	9,759	7,182
	Non-operating income
	Interest income	45	46
	Dividends income	184	217
	Share of profit of entities accounted for using equity	101	157
	method
	Gain on sales of investment securities	0	0
	Dividend income of insurance	218	245
	Penalty income	113	118
	Other	263	554
	Total non-operating income
	927	1,340
	Non-operating expenses
	Interest expenses	490	426
	Financing expenses	67	64
	Other	91	152
	Total non-operating expenses
	649	643
	Ordinary income
	10,037	7,878
	Extraordinary income
	Gain on investment securities	7	0
	Gain on sales of non-current assets	65	-
	Total extraordinary income
	72	0
	Extraordinary loss
	Loss on sale of investment securities	0	0
	Loss on valuation of investment securities	67	25
	Total extraordinary losses
	68	25
	Income before income taxes
	10,042	7,852
	Income taxes
	3,572	3,006
	Net Income
	6,469	4,846
	Profit attributable to non-controlling interests
	371	392
	Profit attributable to owners of parent
	6,098	4,454