Yashima : 【Delayed】Summary of Financial Results for the Year Ended March 2021 (Consolidated)

May 14, 2021

Summary of Financial Results

for the Year Ended March 2021

[Japan GAAP] (Consolidated)

Name of Company:

YASHIMA & Co., Ltd.

Stock Exchange Listing: TSE

Stock Code:

7677

URL https://www.yashima-co.co.jp/

Representative:

Title: President and Representative Director

Name: Kazuaki Takada

Contact Person:

Title: Corporate Officer and General Manager of Administrative Division

Name: Masahiro Abe

Phone: [phone]

Date of ordinary general meeting of shareholders:

June 29, 2021

Date of commencement of dividend payment:

June 15, 2021

Date of filing of securities report:

June 30, 2021

Preparation of supplementary materials:

Yes (in Japanese)

Convening of a results meeting:

Yes (in Japanese) (For analysts)

(Note: Amounts are rounded to nearest million yen.)

1. Financial results for the current fiscal year (April 1, 2020 - March 31, 2021)

(1) Operating results (consolidated)

(Percentage figures represent year-on-year change)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Year ended March 2021

31,828

(11.8)

526

49.9

653

47.9

279

12.3

Year ended March 2020

36,082

(2.5)

350

(45.2)

441

(41.7)

248

(48.1)

(Note) Comprehensive income	Year ended March 2021	432 million yen (－%)
		Year ended March 2020	(27) million yen (－%)
	Net income per	Net income per share	Return on equity	Ratio of ordinary	Ratio of operating
		share	fully diluted		profit to assets	profit to net sales
		Yen	Yen	%	%	%
Year ended March 2021		98.49	－	3.2	2.6	1.7
Year ended March 2020		89.68	－	2.9	1.7	1.0

(Note) Equity in income (losses) of affiliates Year ended March 2021	－million yen
	Year ended March 2020	0 million yen
(2) Financial position (consolidated)
	Total assets	Net assets	Capital adequacy ratio	Net assets per share
	Million yen	Million yen	%	Yen
Year ended March 2021	23,679	8,990	38.0	3,165.84
Year ended March 2020	25,732	8,614	33.5	3,043.27

(Note) Shareholders' equity	Year ended March 2021	8,990 million yen
	Year ended March 2020	8,614 million yen

(3) Cash flow position (consolidated)

	Net cash provided by	Net cash provided by	Net cash provided by	Cash and cash
	(used in) operating	(used in) investing	(used in) financing	equivalents at end of
	activities	activities	activities	period
	Million yen	Million yen	Million yen	Million yen
Year ended March 2021	709	(120)	(70)	9,326
Year ended March 2020	144	9	26	8,796

2. Dividends

		Dividend per share			Total annual	Payout ratio	Dividends/net
				assets
							dividend	(consolidated)
	End of 1Q	End of 2Q	End of 3Q	End of FY	Total	(consolidated)
	Yen	Yen	Yen		Yen	Yen	Million yen	%	%
Year ended March 2020	－	0.00	－		25.00	25.00	70	27.9	0.8
Year ended March 2021	－	0.00	－		25.00	25.00	70	25.4	0.8
Year ending March 2022	－	0.00	－		25.00	25.00		71.0
(forecast)

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3. Forecast for the fiscal year ending March 2022 (April 1, 2021 - March 31, 2022)

(Percentage figures represent year-on-year change)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per share
								owners of parent
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	32,786		3.0	35	(93.3)	164	(74.8)	100	(64.2)	35.21

*Notice:

1. Changes in main subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): No

New consolidations:

－; Exclusions: －

1. Changes in accounting policies, accounting estimates, and restatements
2. 1. Changes in accounting policies due to revision of accounting standards: None
   2. Changes in accounting policies other than those in (a): None
   3. Changes in accounting estimates: None
   4. Restatements: None
3. Number of shares outstanding (ordinary)

(a) Shares outstanding (including treasury shares)

Year ended March 2021	2,880,000 shares	Year ended March 2020	2,880,000 shares
(b) Treasury shares
Year ended March 2021	40,124 shares	Year ended March 2020	49,200 shares
(c) Average number of shares during the term
Year ended March 2021	2,836,385 shares	Year ended March 2020	2,773,107 shares

(Reference) Non-consolidated Financial Results

1. Non-consolidated financial results for the current fiscal year (April 1, 2020 - March 31, 2021)

(1) Operating results (non-consolidated)								(Percentage figures represent year-on-year change)
	Net sales		Operating profit		Ordinary profit	Profit
	millions of yen		%		millions of yen		%		millions of yen	%	millions of yen		%
Year ended March 2021	31,323		(11.9)	453		(14.5)		569	(6.2)	367		(12.3)
Year ended March 2020	35,556		(1.8)	530		(22.4)		607	(23.4)	419		(22.6)
	Net income per share		Net income per share fully diluted
			Yen								Yen
Year ended March 2021			129.73								－
Year ended March 2020			151.29								－
(2) Financial position (non-consolidated)
	Total assets		Net assets		Capital adequacy ratio		Net assets per share
			Million yen		Million yen					%				Yen
Year ended March 2021			22,079		7,601					34.4				2,676.66
Year ended March 2020			24,211		7,152					29.5				2,526.62
(Note) Shareholders' equity	Year ended March 2021				7,601 million yen
	Year ended March 2020				7,152 million yen

non-consolidated business performance results>

A difference occurred between the results for the previous fiscal year and the fiscal year under review due to a decline in sales volume in the Railway Business, among other factors.

*Financial results summaries are not subject to audit.

*Cautionary statement regarding business results forecasts and special notes

(Cautionary statement regarding forward-looking statements)

The financial forecasts and other forward-looking statements in this release are based on currently available information and assumptions considered by the Company to be reasonable and do not represent a commitment from the Company that they will be achieved. Actual results may differ substantially due to various factors. Refer to "(4) Future Outlook" under "1. Analysis of Operating Performance and Financial Position" on page 6 of the supplementary material for the assumptions underlying the forecasts and precautions for using the forecasts.

(Method of obtaining supplementary information to financial results and details of the presentation of financial results) The Company intends to hold a presentation of its financial results on Monday, May 31, 2021.

The Company intends to upload the meeting (stream video) together with the financial results presentation materials to its website immediately after the meeting concludes.

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Contents of Accompanying Materials

1. Analysis of Operating Performance and Financial Position …………………………………………………4
2. 1. Overview of Operating Results …………………………………………………………………………. 4
   2. Overview of Financial Position …………………………………………………………………………..5
   3. Overview of Cash Flows ………………………………………………………………………………… 5
   4. Future Outlook ……………………………………………………………………………………………6
3. Basic Thinking on Selection of Accounting Standards ……………………………………………………… 6
4. Consolidated Financial Statements and Main Notes ………………………………………………………….7
5. 1. Consolidated Balance Sheet ……………………………………………………………………………….7
   2. Consolidated Statement of Income and Consolidated Statement of Comprehensive Income …………….9
   3. Consolidated Statement of Changes in Equity ……………………………………………………………11
   4. Consolidated Statement of Cash Flows ………………………………………………………………….. 12
   5. Notes to the Consolidated Financial Statements …………………………………………………………..13 (Notes Related to Going Concern Assumptions) …………………………………………………………...13 (Additional Information) ………………………………………………………………………………… 13 (Segment Information) …………………………………………………………………………………….. 13 (Per Share Information) ……………………………………………………………………………………. 14 (Significant Subsequent Events) …………………………………………………………………………… 15

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1. Analysis of Operating Performance and Financial Position

(1) Overview of Operating Results

During the fiscal year under review, the Japanese economy continued to experience extremely high levels of uncertainty amid restrictions placed on economic activities due to the COVID-19 pandemic.

Later, personal consumption and corporate activities appeared to be headed toward a recovery with the phased restart of socioeconomic activities, but Japan declared a second state of emergency in early January 2021 following a resurgence in COVID- 19 cases. For this reason, the future remains uncertain.

In terms of the environment surrounding the Group, the situation remains severe because of the Group's main customers of railway companies have seen a substantial decline in railway passenger traffic caused by the voluntary cessation of activities following the COVID-19 pandemic along with a significant downturn in earnings due to the response required to stop the spread of infections, resulting in a review of capital expenditure plans, among other factors.

Amid this backdrop, the Group worked to increase earnings using the growth strategies of "strengthen existing businesses," "tap into new domains and increase added value," and "open up global markets and promote globalization of business."

During the first half of the fiscal year under review, business results were actually stronger than the previous year due to orders obtained in the previous fiscal year and cutbacks in SG&A expenses, but in the second half sluggishness in orders from railway companies and others emerged. However, the Group worked to curtail various expenses associated with changes in working format and marketing activities, given the spread of COVID-19 cases. In addition, the Group increased gross profit amid the decrease in loss on disposal of inventories and valuation losses.

Furthermore, the Group booked ¥158.254 million as deferred tax liabilities and income taxes - deferred for the total tax amount expected to be paid at the time of receiving future dividends of retained earnings from overseas consolidated subsidiaries due to a review of the dividend policy from overseas consolidated companies to the Company.

As a result, net sales came to ¥31,828.416 million (down 11.8% year on year), operating profit came to ¥526.039 million (up 49.9% year on year), ordinary profit came to ¥653.347 million (up 47.9% year on year), and profit attributable to owners of parent came to ¥279.364 million (up 12.3% year on year).

The management results for each segment are presented below.

(Railway Business)

The segment's main products include electrical components for railway cars and body equipment, which the Company sells to railway operators and railway car manufacturers. During the fiscal year under review, the Group's net sales fell as railway companies have seen a substantial decline in railway passenger traffic caused by the voluntary cessation of activities following the COVID-19 pandemic along with a significant downturn in earnings, resulting in reviews of plans for the new construction, updating, renewal, and maintenance of railway cars and equipment. However, the Group worked to curtail various expenses associated with changes in working format and marketing activities, and as a result, profits were comparatively strong.

As a result, net sales came to ¥29,096.897 million (down 11.5% year on year), and operating profit came to ¥743.706 million (up 26.1% year on year).

(General Business)

This segment includes all of the Group's non-railway businesses. For that reason, transactions span a wide range of industries, and customers include industrial equipment manufacturers, power equipment manufacturers, and automotive manufacturers, among others. The segment's main products are connectors and electronic components. In the fiscal year under review, some of the segment's target industries saw a recovery in production and business performance, but the Group experienced a decline in orders and weaker sales performance due to a lack of strength in the subsequent recovery following weaker demand from customers and a decline in production volume. At the same time, the Group worked to curtail marketing expenses, but could

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not compensate for the weakness in sales performance.

As a result, net sales came in at ¥2,731.518 million (down 15.1% year on year), and an operating loss of ¥217.666 million (compared to an operating loss of ¥238.896 million in the previous year) was recorded.

(2) Overview of Financial Position

(Assets)

The balance of assets at the end of the fiscal year under review was down ¥2,053.001 million year on year to ¥23,679.736 million. This was mainly due to increases in cash and deposits (up ¥530.082 million from ¥8,618.879 million to ¥9,148.962 million) and merchandise (up ¥455.333 million from ¥1,613.785 million to ¥2,059.119 million), which were offset by decreases notes and accounts receivable - trade (down ¥1,417.825 million from ¥6,787.089 million to ¥5,369.263 million) and electronically recorded monetary claims - operating (down ¥1,267.156 million from ¥2,392.551 million to ¥1,125.395 million).

(Liabilities)

The balance of liabilities at the end of the fiscal year under review was ¥14,689.134 million, down ¥2,428.703 million from the previous year. This was mainly a result of an increase in deferred tax liabilities (up ¥158.254 million from ¥ million to ¥158.254 million), which was offset by decreases in electronically recorded obligations - operating (down ¥418.159 million from ¥1,153.323 million to ¥735.164 million) along with operating accounts payable (down ¥327.809 million from ¥1,850.078 million to ¥1,522.268 million).

(Net assets)

The balance of net assets at the end of the fiscal year under review was ¥8,990.601 million, up ¥375.701 million from the previous year. This was mainly due to increases in retained earnings (up ¥208.594 million from ¥7,613.571 million to ¥7,822.166 million) and valuation difference on available-for-sale securities (up ¥137.899 million from ¥303.491 million to ¥441.390 million).

(3) Overview of Cash Flows

Operating cash flows increased ¥709.150 million year on year, investing cash flows decreased ¥120.470 million, and financing cash flows decreased ¥70.839 million. As a result, cash and cash equivalents were up ¥530.082 million (up 6.0% year on year) to ¥9,326.962 million.

(Cash flows from operating activities)

Net cash provided by operating activities amounted to ¥709.150 million (as compared to ¥144.496 million the previous year).

Major inflows included a ¥2,688.017 million decrease in trade receivables, ¥653.347 million in profit before income taxes, and a ¥596.316 million decrease in advances received, while major outflows included a ¥2,632.872 million decrease in trade payables, decrease in accrued consumption taxes of ¥214.585 million and ¥210.308 million in income taxes paid.

(Cash flows from investing activities)

Net cash spent in investing activities in the fiscal year under review amounted to ¥120.470 million (as compared to inflows of ¥9.433 million in the previous year).

Major inflows included ¥55.218 million in lease income, while major outflows included ¥29.605 million spent for purchase of intangible assets and ¥8.035 million spent for purchase of investment securities.

(Cash flows from financing activities)

Net cash spent in financing activities in the fiscal year under review amounted to ¥70,839 million (as compared to inflows of ¥26.080 million the previous year).

This was mainly the result of dividends paid of ¥70.770 million resulting in outflows.

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