KITO : Business Results for the Fiscal Year Ended March 31, 2021

This is the English translation of the original Japanese-language Business Results of KITO CORPORATION (the Company) for the fiscal year ended March 31, 2021 and is provided for reference purposes only. Readers are advised that the Company does not guarantee the accuracy of the content contained in this report. In the event of any discrepancy between this translation and the Japanese original, the Japanese original shall prevail.

Business Results for the Fiscal Year Ended March 31, 2021

[Japan GAAP] (Consolidated)

		May 10, 2021
Company	KITO CORPORATION	Listed on the TSE 1st Section
Stock Code	6409	URL: https://kito.com/
Representative	Yoshio Kito, President & CEO
Contact	Shigeki Osozawa
	Managing Director, GM, Financial Management Div.	TEL: [phone]

Expected date of Annual General Meeting of shareholders:	June 22, 2021
Expected date of filing of annual securities report:	June 18, 2021
Expected starting date of dividend payment:	June 23, 2021
Preparation of supplementary financial document:	Yes
Briefing session to explain the financial statements:	Yes (For institutional investors and securities analysts
	(Rounded down to the nearest million yen)

1. Consolidated business results for the fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Consolidated results of operations																				(% change from the previous fiscal year)
					Net sales				Operating income					Ordinary income		Net income attributable to
															owners of parent
			Million yen	%			Million yen	%				Million yen	%			Million yen	%
FY ended Mar. 2021				51,805	(11.8)					4,457	(18.6)						4,550	(8.8)					2,344	(26.8)
FY ended Mar. 2020				58,722	(4.1)					5,474	(14.6)						4,991	(13.2)					3,204	(21.2)
(Note) Comprehensive income				Fiscal	year ended Mar. 2021: 3,556 million yen	(59.4) %
						Fiscal year ended Mar. 2020: 2,231 million yen	(42.5) %
			Net income					Diluted net			Return on		Ratio of ordinary		Ratio of operating
										income to total		income to net
				per share			income per share				equity
												assets					sales
					Yen							Yen								%					%			%
FY ended Mar. 2021				114.29							114.16								8.3					7.1			8.6
FY ended Mar. 2020				156.64							156.26				12.2					8.0			9.3
(Reference) Equity in earnings	of affiliates:	Fiscal year ended Mar. 2021:		― million yen
						Fiscal year ended Mar. 2020: (28) million yen
(2) Consolidated financial position
					Total assets						Net assets							Shareholders'					Net assets
																equity ratio					per share
					Million yen						Million yen						%							Yen
As of Mar. 2021						65,067							30,567								45.4					1,439.48
As of Mar. 2020						62,804							27,927								42.8					1,314.13
(Reference) Shareholders' equity			As of Mar. 2021: 29,537 million yen
						As of Mar. 2020: 26,902 million yen
(3) Consolidated results of cash flows
				Cash flows from					Cash flows from						Cash flows from					Cash and cash
															equivalents at the end
			operating activities				investing activities				financing activities
													of period
					Million yen						Million yen							Million yen					Million yen
FY ended Mar. 2021						6,662							(2,300)								(82)					13,725
FY ended Mar. 2020						5,374							(2,826)								(1,671)					9,297
2. Dividends
						Annual dividend															Dividend	Rate of total
																Total			dividend to net
	End of		End of			End of		Year-end		Annual				payout ratio	assets
	1Q		2Q				3Q														(Consolidated)
FY ended Mar. 2020			Yen		Yen				Yen			Yen						Yen		Million yen					%	%
		―		24.00						―			24.00			48.00				982					30.6	3.7
FY ended Mar. 2021			―		12.00						―			18.00			30.00				615					26.2	2.2
FY ending Mar. 2022			―		22.00						―			22.00			44.00				―					28.2	―
(Forecast)

3. Forecast of consolidated business results for the fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(% change from the previous corresponding period)

							Net income	Net income
	Net sales		Operating income	Ordinary income	attributable to
		per share
							owners of parent
	Million yen	%	Million yen	%	Yen	%	Million yen	%	Yen
1H ending Sep. 2021	25,000	13.4	1,600	28.3	1,500	23.6	1,000	499.2	48.73
FY ending Mar. 2022	55,000	6.2	5,000	12.2	4,800	5.5	3,200	36.5	155.95

• Notes:

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in the scope of consolidation): None
2. Changes in accounting policies, accounting estimates, and restatements Changes in accounting policies due to revisions of accounting standards: None Changes in accounting policies other than above: None
   Changes of accounting estimates: None
   Restatements: None
3. Number of shares issued (common stock)

	Number of shares issued at the end of period (treasury stock included)
	As of Mar. 2021: 21,048,200 shares	As of Mar. 2020: 27,048,200 shares
	Number of treasury stock at the end of period
	As of Mar. 2021: 528,427 shares		As of Mar. 2020: 6,576,603 shares
	Average number of shares over the period
	Fiscal 2020 (ended Mar. 31, 2021): 20,509,115 shares		Fiscal 2019 (ended Mar. 31, 2020): 20,455,444 shares
	(Reference) Summary of non-consolidated business results
	Non-consolidated business results for the fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
	(1) Non-consolidated results of operations						(% change from the previous fiscal year)
		Net sales		Operating income	Ordinary income	Net income
	FY ended Mar. 2021	Million yen			%	Million yen		%		Million yen		%		Million yen	%
	21,534			(19.4)	2,157		(28.8)		3,172		(10.8)		2,460	(5.2)
	FY ended Mar. 2020	26,704			(10.4)	3,029		(21.2)		3,555		(19.7)		2,594	4.6
		Net income	Diluted net
		per share		income per share
	FY ended Mar. 2021				Yen			Yen
				119.97		119.83
	FY ended Mar. 2020				126.85		126.54
	(2) Non-consolidated financial position
		Total assets	Net assets		Shareholders' equity		Net assets per share
			ratio
	As of Mar. 2021		Million yen		Million yen			%			Yen
			47,680		20,361			42.6			989.18
	As of Mar. 2020			45,512		18,561			40.6			903.46

(Reference) Shareholders' equity: As of Mar. 2021: 20,297 million yen As of Mar. 2020: 18,495 million yen

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• This financial summary is not subject to auditing by certified public accountants or audit firms.
• Explanation regarding the appropriate use of business forecasts and other special instructions

(Notes to the forward-looking statements)

The performance forecasts and other forward-looking statements presented in this report are based on information currently available and certain assumptions deemed reasonable and are not to be read as guarantees of future performance by the Company. Actual performance, etc., may differ substantially due to various factors. For preconditions of the assumptions and special instructions regarding the appropriate use of business forecasts, please refer to "(4) Future outlook, 1. Overview of business results" on page 7 of the appendix.

(Method of obtaining the supplementary financial documents and the contents of the briefing session)

From the standpoint of preventing the spread of COVID-19, the Company plans to hold its results briefing for institutional investors and analysts on a livestream event on Tuesday, May 18, 2021. Briefing materials to be used on this day will be made available on the Company's website shortly after the release of this financial report.

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Contents of Attached Materials

1. Overview of business results	P. 5
(1)	Overview of business results for the subject period	P. 5
(2)	Overview of financial position for the subject period	P. 6
(3)	Overview of cash flows for the subject period	P. 6
(4)	Future outlook	P. 7
2. Basic approach toward the selection of accounting standards	P. 7
3. Consolidated financial statements and major notes	P. 8
(1)	Consolidated balance sheets	P. 8
(2)	Consolidated statements of income/Consolidated statements of comprehensive income	P. 10
	Consolidated statements of income	P. 10
	Consolidated statements of comprehensive income	P. 11
(3)	Consolidated statements of changes in net assets	P. 12
(4)	Consolidated statements of cash flows	P. 14
(5)	Notes to consolidated financial statements	P. 16
	(Notes regarding ongoing concern assumption)	P. 16
	(Additional Information)	P. 16
	(Segment information)	P. 16
	(Per share information)	P. 19
	(Important subsequent events)	P. 19

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1. Overview of business results

(1) Overview of business results for the subject period

During fiscal 2020 (ended March 31, 2021), corporate management became increasingly difficult from the start of the year caused by the temporary suspension of business activity due to the effects of the COVID-19 pandemic. Kito Group focused on upholding and securing its supply chain and was able to maintain stable production while bearing in mind the need to sustain customer service. The Company also made the health and safety of employees a top priority, through establishing a remote work environment, revising work operations and enhancing efficiency. In addition, the Company took steps to secure earnings by curbing expenditures companywide.

Demand fell sharply in the first quarter of fiscal 2020 in response to the impact from the COVID-19 pandemic, but began to recover gradually from the second quarter. Despite concerns of further spread of the virus, demand continued to recover, and in the fourth quarter reached a level on a par with the previous fiscal year. As a result, net sales amounted to ¥51,805 million (down 11.8% year on year), with operating income of ¥4,457 million (down 18.6%), and ordinary income of ¥4,550 million (down 8.8%). Net income attributable to owners of parent amounted to ¥2,344 million (down 26.8%), reflecting the record during the subject fiscal year of ¥522 million for both an impairment loss for the Company's Dutch subsidiary, and restructuring expenses at its Australian subsidiary.

Results by segment are as follows. The Kito Group's business activities are classified by geographical segment for the Company and its consolidated group companies.

Segment	Net Sales	Operating Income (Loss)
YoY change in %	YoY change in %
Japan	21,534 million yen, down 19.4%	4,313 million yen, down 21.5%
The Americas	24,013 million yen, down 14.8%	1,157 million yen, down 25.4%
China	7,104 million yen, down 5.3%	1,043 million yen, up 6.5%
Asia	2,934 million yen, down 8.7%	207 million yen, up 13.7%
Europe	4,462 million yen, down 2.5%	(368) million yen
(303 million yen of operating loss for the previous FY)
Others	1,504 million yen, up 2.8%	(35) million yen
(48 million yen of operating loss for the previous FY)

Japan:

In the domestic market, demand recovered gradually and steadily from the second quarter, and in the fourth quarter reached a level on par with the previous fiscal year. Exports were affected by weakened demand in overseas markets, with a decline in shipments to subsidiaries. As a result, net sales amounted to ¥21,534 million (down 19.4% from the previous fiscal year), with operating income of ¥4,313 million (down 21.5%).

The Americas:

Mild recovery continued in the U.S. from the second quarter. Despite the postponing investments due to expectations for the economic policies of the new administration, and confusion over harbor functions on the west coast in the closing days of the period, sales in the fourth quarter recovered to a level on a par with the previous fiscal year. As a result, net sales amounted to ¥24,013 million (down 14.8% from the previous fiscal year), with operating income of ¥1,157 million (down 25.4%).

China:

China managed to recover from the effects of the COVID-19 crisis quickly, and recently, earnings have rapidly improved. Net sales amounted to ¥7,104 million (down 5.3% from the previous fiscal year), with operating income of ¥1,043 million (up 6.5%). Of note, the fiscal year for this segment starts in January, so the results of the fiscal year are from January through December.

Asia (excluding Japan and China):

Capital investment remains sluggish in automotive-related and other industries in the Southeast Asia region due to the impact from the COVID-19 pandemic. However, LCD-related sales in South Korea recovered following a sharp decline in the previous fiscal year. As a result, net sales amounted to ¥2,934 million (down 8.7% from the previous fiscal year), with operating income of ¥207 million (up 13.7%).

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