Ushio : Consolidated Financial Results for the First Three Months of the Fiscal Year Ending March 31, 2023

Translation

August 2, 2022

Consolidated Financial Results

for the First Three Months of the Fiscal Year Ending March 31, 2023

Company name:	USHIO INC.
Listing:	Prime Market of the Tokyo Stock Exchange
Stock code:	6925
URL:	https://www.ushio.co.jp/en/
Representative:	Koji Naito, President and Chief Executive Officer
Inquiries:	Hideaki Takizawa, General Manager, Accounting & Finance Department
	TEL: [phone] (from overseas)

Scheduled date to file Securities Report:	August 5, 2022
Scheduled date to commence dividend payments:	－
Preparation of supplementary material on earnings:	Yes
Holding of earnings performance review:	Yes (for analysts)
	(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated performance for the first three months of the fiscal year ending March 31, 2023

(from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results			(Percentages indicate year-on-year changes.)
	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
First three months ended Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
June 30, 2022	39,728	13.6	4,477	73.9	6,293	90.2	3,858	14.2
June 30, 2021	34,981	47.7	2,574	―	3,308	915.1	3,378	―

(Note)	Comprehensive income
	For the first three months ended June 30, 2022: ¥	13,266 million [128.2 %]
	For the first three months ended June 30, 2021: ¥	5,812 million [319.4%]
		Basic earnings	Diluted earnings
		per share	per share
First three months ended	Yen	Yen
June 30, 2022	32.18	―
June 30, 2021	28.02	―

(2) Consolidated financial position

	Total assets	Net assets		Equity ratio
As of	Millions of yen	Millions of yen	%
June 30, 2022		330,965		239,355	72.3
			321,096		235,202		73.2
March 31, 2022
(Reference) Equity
As of June 30, 2022	: ¥	239,263 million
As of March 31, 2022: ¥	235,118 million

2. Cash dividends

				Annual dividends
		First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end		Total
		Yen	Yen	Yen	Yen		Yen
Fiscal year ended	―	―	―	50.00	50.00
March 31, 2022
Fiscal year ending	―
March 31, 2023
Fiscal year ending
March 31, 2023		―	―	50.00		50.00
(Forecast)
(Note)	Revisions to the forecasts of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

(Percentages indicate year-on-year changes.)

			Net sales			Operating profit		Ordinary profit		Profit attributable to	Basic earnings per
							owners of parent	share
			Millions of yen	%		Millions of yen	%		Millions of yen	%		Millions of yen	%		Yen
	Fiscal year ending		170,000	14.2		17,000	30.1		18,500	21.7		14,000	11.1		117.79
	March 31, 2023
(Note) Revisions to the consolidated earnings forecasts most recently announced: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in the scope of consolidation): None
2. Application of a specific accounting procedure for preparing quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and restatements

1. Changes in accounting policies due to revisions to accounting standards: Yes
2. Changes in accounting policies due to other reasons: None
3. Changes in accounting estimates: None
4. Restatements: None

1. Number of issued shares (common stock)

a. Total number of issued shares at the end of the period (including treasury stock)

	As of June 30, 2022	127,000,000 shares
	As of March 31, 2022	127,000,000 shares
b. Number of shares of treasury stock at the end of the period
	As of June 30, 2022	8,271,465 shares
	As of March 31, 2022	6,409,833 shares
c. Average number of shares during the period
	As of June 30, 2022	119,914,515	shares
	As of June 30, 2021	120,576,880	shares

(Note) The Company's shares held in trust introduced with respect to its stock remuneration plan for directors as treasury shares within shareholders' equity are included in the number of treasury shares.

• This Consolidated Financial Review is not subject to audit procedures by Certified Public Accountants or audit firm.
• Notes on the proper use of earnings forecasts and other special matters
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual business and other results may differ substantially due to various factors.

*To obtain Financial Presentation

The Financial Presentation will be posted on the website of USHIO INC. on August 2, 2022.

[Attached document]
	Index
1. Qualitative Information on Financial Results for the Term ....................................................................	2
(1)	Business Performance ......................................................................................................................................	2
(2)	Review of Financial Position ...........................................................................................................................	3
(3)	Explanation of Consolidated Forecast and Other Forward-looking statements................................................	3
2. Consolidated Financial Statements................................................................................................................	3
(1)	Consolidated Balance Sheets............................................................................................................................	4
(2)	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .......................	6
	Consolidated Statements of Income (cumulative) ................................................................................................	6
	Consolidated Statements of Comprehensive Income (cumulative) ......................................................................	7
3. Notes to Quarterly Consolidated Financial Statements ..........................................................................................	8
(Notes on premise of going concern) ........................................................................................................................	8
(Notes to Significant Changes in the Amount of Shareholders' Equity) ...................................................................	8
(Change in Acounting Policy) ...................................................................................................................................	8
(Segment information) ..............................................................................................................................................	9

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1. Qualitative Information on Financial Results for the Term

(1) Business Performance

The Ushio Group experienced another uncertain business climate in the first quarter of the fiscal year ending March 31, 2023. Economic activity picked up despite new waves of COVID-19 infections. At the same time, a range of factors slowed down an economy recovery. These included shortages of semiconductors and other parts, raw materials price hikes, supply chain disruptions, and further energy and raw materials price rises following Russia's invasion of Ukraine.

It was against that backdrop that cinemas worldwide reopened and improved screen operation rates despite the impact of infections with new COVID-19 strains. The semiconductor, electronic device, and printed circuit board markets enjoyed robust demand from 5G technology uptakes and progress in employing the Internet of Things and artificial intelligence. The flat panel display market benefited from production capacity utilization remaining high for mobile devices and monitors.

The average exchange rate during the term was ¥126 to the U.S. dollar, from ¥110 a year earlier.

Consolidated first-quarter net sales accordingly increased 13.6% from the previous corresponding period, to ¥39.7 billion yen. Operating profit jumped 73.9%, to ¥4.4 billion. Ordinary profit surged 90.2%, to ¥6.2 billion. Profit attributable to owners of parent rose 14.2%, to ¥3.8 billion.

Segment results were as follows.

Light Source Business

Discharge Lamps

Production of UV lamps for lithography equipment remained high, with replacement lamp sales rising. This growth was due to higher demand for semiconductors and electronic devices from 5G technology uptakes and against the backdrop of Internet of Things and artificial intelligence progress. Another contributor was stay-at-home-driven demand growth for LCD panels for mobile devices and monitors.

Sales of lamps for related optical equipment increased on high operating levels for Ushio-made optical equipment employed in LCD panel-related manufacturing processes. Sales of replacement xenon lamps for cinema projectors were up on cinemas reopening and recovering screen operation rates as economic activities resumed despite new COVID-19 infection waves in many countries. Discharge lamp sales were thus up from a year earlier.

Halogen Lamps

Sales of halogen lamps for office automation equipment were basically unchanged. One key performance factor for the term was that demand for this equipment recovered from the impact of the pandemic during the term. Another was parts shortages among set manufacturers. Sales of heater lamps for semiconductor production processes rose in a robust semiconductor market. Sales of halogen lamps accordingly increased in the period under review.

Light Source business sales thus climbed 17.2% from a year earlier, to ¥16.0 billion. Segment operating profit was up 58.6%, to ¥3.1 billion.

Optical Equipment Business

In the semiconductor, electronic device, and printed circuit board markets, demand continued to rise for data center servers in view of the 5G, Internet of Things, and artificial intelligence factors mentioned earlier. Sales of large field steppers for advanced IC package substrates were thus basically unchanged. Sales of direct imaging lithography equipment for package and printed circuit boards increased. In contrast, demand for LCD panels ran its course, driving related capital investments and equipment sales down.

In EUV light sources for EUV lithography mask inspections, light source sales decreased owing to temporary demand adjustments, offsetting the impact of higher maintenance services on solid operating levels for light sources sold before the period under review.

Segment sales therefore decreased 7.0%, to ¥11.5 billion, with operating profit rising 0.4%, to ¥1.0 billion.

2

Imaging Equipment Business

Cinemas progressed with reopening and regaining screen operation rates during the term, particularly in Europe and the United States. Capital investment demand was on a recovery track, with digital cinema projector sales rising. In general imaging, sales of related products increased on gradual demand recoveries, particularly in North America.

This reflected operational resumptions for commercial facilities, amusement parks, and events.

Segment sales jumped 38.5%, to ¥11.3 billion. Segment operating profit was ¥246 million, from an operating loss of ¥477 million a year earlier.

Others

Despite rises in COVID-19 infections keeping investments on the back burner, particularly for molding machines, related markets gradually recovered.

Other segment sales accordingly increased 14.6%, to ¥752 million. Operating profit was ¥10 million, compared with an operating loss of ¥1.0 million a year earlier.

(2) Review of Financial Position

Assets

Total assets increased by ¥9,869 million as compared to the end of the previous fiscal year, to ¥330,965 million. The main factors behind this increase was an increase in inventories due to an increase in orders for optical equipment and other products, while the decrease in cash and deposits due to dividend, tax payments and the purchase of treasury shares.

Liabilities

Total liabilities increase by ¥5,716 million as compared to the end of the previous fiscal year, to ¥91,610 million. The main factors behind this increase were increase in notes and accounts payable - trade due to an increase in material purchase, while the decrease in income taxes payable and provision for bonuses due to tax and bonus payments.

Net Assets

Net assets increase by ¥4,152 million as compared to the end of the previous fiscal year, to ¥239,355 million. The main factors behind this increase were an increase in foreign currency translation adjustments from the yen depreciating toward the end of the first quarter, and retained earnings from posting profit attributable to owners of parent.

(3) Explanation of Consolidated Forecast and Other Forward-looking statements

There are no revisions to the full-year consolidated forecast for the fiscal year ending March 2023 announced on May 11, 2022. The forecast is based on currently available information, and that certain reasonable assumptions and results could differ owing to a range of factors.

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