T&S : Summary of Financial Results for the first quater 2021

FOR TRANSLATION PURPOSE ONLY

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes.

In the event of any discrepancy between this translated version and the original Japanese version, the latter shall prevail.

April 14, 2021

Summary of Financial Results

for the First Quarter of the Fiscal Year 2021 (FY11/2021)

[Japanese standards] (Non-Consolidated)

Company name:	T&S inc.
Stock exchange listing:	Tokyo
Stock code:	4055	URL:	https://www.tecsvc.co.jp/
Representative:	President and CEO	Yoshihiro Takekawa
Inquiries:	Director, Executive Officer and General Manager of Corporate Division

	Hiroshi Kinoshita	TEL: [phone]
Scheduled date to file Quarterly Securities Report:	April 14, 2021
Scheduled date to commence dividend payments:	－
Preparation of supplementary material on financial results:	Yes
Holding of financial results meeting:	No

(Amounts less than one million yen are rounded down)

1. Financial results of the first quarter of FY11/2021 (December 1, 2020 - February 28, 2021)

(1) Operating results (cumulative)

(Percentages indicate year-on-year changes)

Net sales

Operating income

Ordinary income

Net income

million yen

%

million yen

%

million yen

%

million yen

%

1Q of FY11/2021

586

－

71

－

71

－

50

－

1Q of FY11/2020

－

－

－

－

－

－

－

－

Net income

Diluted net income

per share

per share

yen

yen

1Q of FY11/2021

14.16

13.14

1Q of FY11/2020

－

－

(Note)

Quarterly financial statements were not prepared for the 1Q of FY11/2020, and therefore figures for the 1Q of FY11/2020 and

increase/decrease ratios of the 1Q of FY11/2021 as compared to the 1Q of FY11/2020 are omitted.

(2) Financial position

Total assets

Net assets

Equity ratio

million yen

million yen

%

1Q of FY11/2021

1,512

1,244

82.3

FY11/2020

1,502

1,212

80.7

(Reference) Shareholders equity

1Q of FY11/2021:

1,244 million yen

FY11/2020:

1,212 million yen

2. Cash dividends

Annual dividends per share

1Q-end

2Q-end

3Q-end

Year-end

Total

yen

yen

yen

yen

yen

FY11/2020

－

0.00

－

13.50

13.50

FY11/2021

－

FY11/2021 (forecasts)

0.00

－

6.75

6.75

(Notes)

1. Revisions to dividend forecasts published most recently: No

2. The Company carried out share splitting to split one share into two shares, on December 1, 2020. Dividends for FY11/2020 are actual amounts of dividends before such share splitting.

3. Performance forecasts for FY11/2021 (December 1, 2020 - November 30, 2021)

(Percentages indicate year-on-year changes)

	Net sales		Operating income	Ordinary income	Net income	Net income
		per share
	million yen		%	million yen	%	million yen	%	million yen	%	yen
Full year	2,464		8.7	322	5.7	328	7.9	229	(2.9)	61.37

(Note) Revisions to performance forecasts published most recently: No

FOR TRANSLATION PURPOSE ONLY

*Notes

1. Application of special accounting methods to the preparation of quarterly financial statement: No
2. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements ① Changes in accounting policies due to revisions to accounting standards and other regulations: No

1. ② Changes in accounting policies due to other reasons: No

   ③ Changes in accounting estimates: No

   ④ Restatement of prior period financial statements: No

2. Number of issued shares (common shares)
3. • Total number of issued shares at the end of the period (including treasury stock)

1Q of FY11/2021:

3,713,200 shares

FY11/2020:

3,585,600 shares

• Number of treasury stock at the end of the period

1Q of FY11/2021:

－ shares

FY11/2020:

－ shares

• Average number of shares during the period

1Q of FY11/2021:

3,595,158 shares

1Q of FY11/2020:

－ shares

(Note) The Company carried out share splitting to split one share into 1,100 shares, on April 14, 2020, and further carried out share splitting to split one share into two shares, on December 1, 2020. Total number of issued shares at the end of the period, number of treasury stock at the end of the period, and average number of shares during the period are calculated assuming that such share splitting was carried out at the beginning of FY11/2020.

• Summary of financial results is not covered by audit by a certified public accountant or an auditing firm.
• Explanation regarding appropriate use of the performance forecasts and other special notes

(Notes on descriptions about the future)

Descriptions about the future such as performance forecasts contained in this document are based on information currently available to the Company and certain presumptions considered as reasonable, and those are not intended to indicate the Company should assure that it would realize such forecasts. Meanwhile, actual performance in the future may differ substantially, influenced by a wide variety of factors. For preconditions for performance forecasts and precaution statements in using such forecasts, please see the appendix, page 2, "1. Qualitative Information regarding the Financial Results for the Current Quarter: (3) Descriptions regarding future prospects such as performance forecasts".

(How to obtain supplementary references regarding quarterly results)

Quarterly supplementary material on financial results is concurrently disclosed on TDnet.

FOR TRANSLATION PURPOSE ONLY	T&S inc. (4055)
	Summary of Financial Results for the First Quarter of FY11/2021
○ Table of Contents: Appendix
1. Qualitative Information regarding the Financial Results for the Current Quarter.....................................................	2
(1)	Descriptions regarding operating results .............................................................................................................	2
(2)	Descriptions regarding financial position ............................................................................................................	2
(3)	Descriptions regarding future prospects such as performance forecasts..............................................................	2
2. Quarterly Financial Statements and Principal Notes.................................................................................................	3
(1)	Quarterly Balance Sheets.....................................................................................................................................	3
(2)	Quarterly Statements of Income ..........................................................................................................................	4
	(The first quarter cumulative period)...................................................................................................................	4
(3)	Notes on Quarterly Financial Statements ............................................................................................................	5
	(Going concern assumption)................................................................................................................................	5
	(Notes in case of significant changes in the amount of shareholders' equity).....................................................	5
	(Segment information) ........................................................................................................................................	5

1

FOR TRANSLATION PURPOSE ONLY	T&S inc. (4055)
	Summary of Financial Results for the First Quarter of FY11/2021

1. Qualitative Information regarding the Financial Results for the Current Quarter

(1) Descriptions regarding operating results

During the current first quarter cumulative period, Japanese economy has still been affected by COVID-19, such as repeated restrictions on social/economic activities due to reissuance of the state of emergency, and there remain extremely unpredictable situations for the future. While taking measures against further spread of infections and raising levels of social/economic activities, some new styles of business activities are becoming more prevalent in view of so-called After Corona / With Corona, such as making use of working from home and online meeting, which boosts up importance of IT and accelerates operational conversion to IT-enabled business. During the current first quarter cumulative period, there was no direct impact of COVID-19 on the Company's business. However, we still need to pay attention to economic downturn, impacts on employment environment and other situations caused by re-expansion of infections both domestic and overseas.

Business of the Company comprises of a single segment of system development and other related services, but develops as a structure with three categories of Solution, Semiconductor, and Advanced Technology. In such an economic environment as described above, "Solution Category" has, not focusing on specific industrial domains, continued to provide IT human resources and put its efforts to business expansion to support IT development. "Semiconductor Category" has put its efforts to business expansion for supporting IT infrastructure operation in general at semiconductor factories, such as maintenance & operation services for intra-factory systems and IT helpdesks. "Advanced Technology Category" has put its efforts to expanding provision of solutions for customers being in the process of development of AI-related products.

As a result, operating results of the current first quarter cumulative period was as follows: net sales of 586,564 thousand yen; operating income of 71,508 thousand yen; ordinary income of 71,781 thousand yen; and quarterly net income of 50,896 thousand yen.

Operating results of the current first quarter cumulative period in each category are as follows.

• Solution Category
  Net sales in the current first quarter cumulative period was 454,682 thousand yen.

Orders from major customers were fairly well, notably development of management systems for factories/plants. and increased orders for commissioned development projects contributed to sales.

• Semiconductor Category

Net sales in the current first quarter cumulative period was 111,007 thousand yen.

Orders from major customers were fairly well, and dispatching more engineers for maintenance/operation services at semiconductor factories contributed to sales.

③Advanced Technology Category

Net sales in the current first quarter cumulative period was 20,874 thousand yen.

Besides continuous orders received fairly well from existing customers mainly for supportive services for research and development of AI algorithms, orders from new customers also contributed to sales.

1. Descriptions regarding financial position (Assets)

Total current assets was 1,425,951 thousand yen at the end of the current first quarter fiscal period, i.e. increase by 18,454 thousand yen as compared to the end of the previous fiscal year. This in mainly due to increase in work in progress by 16,197 thousand yen in the context of timing of acceptance inspection. Total non-current assets was 86,603 thousand yen, i.e. decrease by 8,821 thousand yen as compared to the end of the previous fiscal year. This in mainly due to decrease in deferred tax assets by 8,242 thousand yen because of paying winter bonus.

As a result, total assets was 1,512,555 thousand yen, i.e. increase by 9,632 thousand yen as compared to the end of the previous fiscal year.

(Liabilities)

Total current liabilities was 220,023 thousand yen at the end of the current first quarter fiscal period, i.e. decrease by 23,581thousand yen as compared to the end of previous fiscal year. This is mainly due to decrease in accrued expenses by 34,975 thousand yen because of paying winter bonus, decrease in income taxes payable by 24,595 thousand yen and decrease in accrued consumption taxes by 14,614 thousand yen because of paying taxes on one hand, and increase in reserve for bonus by 17,582 thousand yen, increase in accounts payable - other by 17,057 thousand yen, and increase in deposits received by 10,121 thousand yen on the other. Total non-current liabilities was 48,254 thousand yen, i.e. increase by 1,288 thousand yen as compared to the end of the previous fiscal year. This is due to increase in provision for retirement benefits of 1,288 thousand yen.

As a result, total liabilities was 268,278 thousand yen, i.e. decrease by 22,293 thousand yen as compared to the end of the previous fiscal year.

(Net assets)

Total net assets was 1,244,277 thousand yen at the end of the current first quarter fiscal period, i.e. increase by 31,925 thousand yen as compared to the end of the previous fiscal year. This is mainly because retained earnings increased by 50,896 thousand yen through recording quarterly net income, whereas it decreased by 24,202 thousand yen due to payment of dividends.

(3) Descriptions regarding future prospects such as performance forecasts

There is no change in performance forecasts for the full year, as announced in the "Summary of Financial Results for the Fiscal Year Ended November 30, 2020 (FY11/2020)" published on January 14, 2021.

2

FOR TRANSLATION PURPOSE ONLY	T&S inc. (4055)
	Summary of Financial Results for the First Quarter of FY11/2021

2. Quarterly Financial Statements and Principal Notes

(1) Quarterly Balance Sheets

(Thousand yen)

				Previous fiscal year		Current first quarter
					fiscal period
				(Nov. 30, 2020)
					(Feb. 28, 2021)
	Assets
	Current assets
	Cash and deposits			1,016,928		1,024,808
	Notes and accounts receivable - trade	250,442	246,193
	Work in process			6,147		22,344
	Accounts receivable - other	121,206	124,254
	Other			13,672		9,249
	Allowance for doubtful accounts	(900)	(900)
	Total current assets			1,407,497		1,425,951
	Non-current assets
	Property, plant and equipment			23,542		22,760
	Intangible assets	1,178	1,063
	Investments and other assets			70,704		62,779
	Total non-current assets	95,425	86,603
	Total assets			1,502,923		1,512,555
	Liabilities
	Current liabilities
	Accounts payable - trade	64,473	69,633
	Income taxes payable			42,326		17,730
	Provision for bonuses	5,822	23,405
	Other			130,981		109,253
	Total current liabilities	243,604	220,023
	Non-current liabilities
	Provision for retirement benefits	38,895	40,183
	Other			8,071		8,071
	Total non-current liabilities	46,966	48,254
	Total liabilities			290,571		268,278
	Net assets
	Shareholders' equity
	Capital stock	334,600	337,215
	Capital surplus			285,929		288,545
	Retained earnings	591,821	618,515
	Total shareholders' equity			1,212,351		1,244,277
	Total net assets	1,212,351	1,244,277
	Total liabilities and net assets			1,502,923		1,512,555

3

FOR TRANSLATION PURPOSE ONLY	T&S inc. (4055)
	Summary of Financial Results for the First Quarter of FY11/2021

1. Quarterly Statements of Income (The first quarter cumulative period)

			(Thousand yen)
			Current first quarter
			cumulative period
			(Dec. 1, 2020 - Feb. 28, 2021)
	Net sales		586,564
	Cost of sales	413,845
	Gross profit		172,718
	Selling, general and administrative expenses	101,210
	Operating income		71,508
	Non-operating income
	Interest income		3
	Subsidy income	330
	Other		0
	Total non-operating income	333
	Non-operating expenses
	Stock issuance cost	60
	Other		0
	Total non-operating expenses	60
	Ordinary income		71,781
	Net income before income taxes	71,781
	Income taxes-current		12,642
	Income taxes-deferred	8,242
	Total income taxes		20,884
	Net income		50,896

4

FOR TRANSLATION PURPOSE ONLY	T&S inc. (4055)
	Summary of Financial Results for the First Quarter of FY11/2021

1. Notes on Quarterly Financial Statements
   (Going concern assumption) Not applicable.
   (Notes in case of significant changes in the amount of shareholders' equity) Not applicable.

(Segment information)

【Segment Information】

Current first quarter cumulative period (Dec 1, 2020 - Feb 28, 2021)

Business of the Company comprises of a single segment of system development and other related services and therefore description of segment information is omitted.

5