Marubun : Summary of Consolidated Financial Results for the Fiscal Year Ended June 30, 2021

Translation

Head Office	: 8-1 Nihonbashi Odenmacho, Chuo-ku, Tokyo, Japan
Securities Code : 7537 TSE, 1st section	URL https://www.marubun.co.jp
Representative	: Toru Iino, CEO and Representative Director
Contact	: Toshihiro Shibuya, Director, Corporate Planning Dept.	TEL : [phone]
Preparation of supplementary material : Yes		July 30, 2021
Holding of investor meeting	: No

Summary of Consolidated Financial Results for the Three Months Ended June 30, 2021

1. Consolidated Financial Results for the Three Months Ended June 30, 2021 (April 1,2021 - June 30,2021)

(1) Consolidated Operating Results

	Net Sales		Operating Income		Ordinary Income		Profit Attributable
				to Owners of Parent
For the Three months ended	Millions of Yen	％		Millions of Yen	％		Millions of Yen	％	Millions of Yen	％
June 30, 2021	37,347	-		1,076	-		1,005	-	557	-
June 30, 2020	62,238	5.2		(603)	-		(369)	-	(310)	-
Note : Comprehensive income	Three months ended	June 30, 2021	1,220 Millions of Yen	［-%］
	Three months ended	June 30, 2020	(623) Millions of Yen	［-%］
	Earnings per Share	Earnings Per Share
	-Basic-			-Diluted-
For the Three months ended		Yen			Yen
June 30, 2021	21.32			-
June 30, 2020	(11.89)			-

(Note)

MARUBUN Corporation (the Company) has been applied the"Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the current fiscal year and the figures for the first quarter of the fiscal year ending March 31, 2022 are after the application of the said accounting standard, etc., the percentage change from the same quarter of the previous fiscal year is not stated.

(2) Financial Position

	Total Assets	Total Net Assets	Equity Ratio
	Millions of Yen	Millions of Yen	％
As of June 30, 2021	133,674	46,450	30.7
As of March 31, 2021	127,006	45,040	31.5

(Note)

As the Company have been applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other standards from the beginning of the first quarter of the current fiscal year, and the figures for the first quarter of the fiscal year ending March 31, 2022 are after the application of these standards.

2. Dividends

			Dividend Per Share
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Annual
	Yen	Yen	Yen	Yen	Yen
Year ended March 31, 2021	-	8.00	-	8.00	16.00
Year ending March 31, 2022	-
Year ending March 31, 2022		10.00	-	20.00	30.00
(Forecast)

Translation

3. Consolidated Financial Forecasts for the Fiscal Year Ending March 31, 2022

	Net Sales		Operating Income		Ordinary Income		Profit Attributable
				to Owners of Parent
	Millions of Yen	％	Millions of Yen	％	Millions of Yen	％	Millions of Yen	％
Six months ending	70,000	-	600	-	460	-	230	-
September 30, 2021
Year ending March 31, 2022	153,000	-	3,200	-	3,000	-	1,900	-
	Earnings per Share
	-Basic-
Six months ending	Yen
8.80
September 30, 2021
Year ending March 31, 2022	72.70

(Note)

As the Company apply the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the fiscal year ending March 31, 2022, the consolidated financial forecast above is the amount after applying the said accounting standard, and the percentage change from the previous year and the same quarter of the previous year is not stated.

1. Summary of operating results for the fiscal year under review

During the first quarter of the consolidated fiscal year under review (April 1 to June 30, 2021), the Japanese economy showed signs of a recovery in corporate production activities and capital investment, although consumer spending and employment remained sluggish, affected by the redeclaration of a state of emergency due to the spreading COVID-19. In Europe, the United States, and China, economic activities were resumed in stages, so that in response to such recovery of the world economy, exports continued to increase.

In the electronics industry, in which the Marubun Group (the "Group") operates its business, corporate initiatives for digital transformation were accelerated to promote remote work and advance digitization, and consequently, demand for PCs, communication equipment, and other electronics remained strong. In addition, in the fields such as automobiles, industrial equipment, and semiconductor manufacturing, corporate capital investment began to recover. On the other hand, in the semiconductor market, supply shortages of components became severe due to robust demand for those used in 5G communication equipment, PCs, and consumer equipment.

In this situation, responding to the recovery of the electronics market, the consolidated net sales of the Group during the first quarter of the fiscal year under review reached 37,347 million yen. Meanwhile, operating income was 1,076 million yen, with ordinary income of 1,005 million yen and profit attributable to owners of parent of 557 million yen, reflecting strong sales of products with relatively high profit margins, sales of products in the quarter under review that were purchased in the previous term when the yen was strong, boosting gross profit on a yen conversion basis, and decreased selling, general and administrative expenses. The Group has applied Accounting Standards for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) since the beginning of the first quarter of the consolidated fiscal year under review, and net sales of the first quarter of the consolidated fiscal year under review decreased by 31,281 million yen compared to net sales calculated by the previous method. For the details, please see "(4) Notes on Quarterly Consolidated Financial Statements."

Operating results by business segment are as follows: (Electronic Devices business)

In the Electronic Devices business, net sales were 27,525 million yen, supported by strong sales of semiconductors for PC peripherals equipment, communication equipment, and consumer equipment, driven by increasing telework and stay-home demand, while the expansion of new commercial rights also contributed. Segment profit was 872 million yen due to an improved gross profit ratio and decreased selling, general and administrative expenses.

(Electronic Systems business)

In the Electronic Systems business, demand for electronic device assembly and inspection machines increased in association with an increase in capital investments for industrial equipment. Meanwhile, diode lasers to be incorporated into industrial equipment also sold well. In addition, medical equipment, space and defense electronics, and information communication equipment performed steadily. Consequently, net sales amounted to 9,822 million yen with segment profit of 205 million yen.

2. Summary of consolidated financial conditions for the fiscal year under review

(Assets)

Current assets at the end of the first quarter of the consolidated fiscal year under review stood at 121,999 million yen, an increase of 7,195 million yen from the end of the previous consolidated fiscal year. This result was mainly attributable to a decrease in notes and accounts receivable - trade of 14,982 million yen, a decrease in merchandise and finished goods of 8,962 million yen, and an increase in accounts receivable of 28,537 million yen. Non- current assets amounted to 11,675 million yen, decreasing 527 million yen from the end of the previous consolidated fiscal year. This change chiefly reflected decreases of 287 million yen in deferred tax assets and 265 million yen in tools, furniture and fixtures.

As a result, total assets increased by 6,667 million yen from the end of the previous fiscal year to 133,674 million yen.

(Liabilities)

Current liabilities at the end of the first quarter of the consolidated fiscal year under review came to 81,378 million yen, an increase of 5,213 million yen from the end of the previous fiscal year. This was attributable largely to a decrease of 13,666 million yen in notes and accounts payable - trade, and increases of 14,879 million yen in accounts payable and 3,272 million yen in short-term borrowings. Non-current liabilities amounted to 5,845 million yen, an increase of 44 million yen from the end of the previous fiscal year. This was primarily a result of an increase of 47 million yen in retirement benefit liability.

As a result, total liabilities increased by 5,257 million yen from the end of the previous fiscal year, to 87,224 million yen.

(Net assets)

Net assets totaled 46,450 million yen at the end of the first quarter of the consolidated fiscal year under review, an increase of 1,410 million yen from the end of the previous consolidated fiscal year. This was a result, in large part, of increases of 758 million yen in retained earnings and 449 million yen in foreign currency translation adjustment.

As a result, the equity ratio stood at 30.7% (compared to 31.5% at the end of the previous fiscal year).

3. Future outlook

There has been no revision to the consolidated financial forecasts for the fiscal year ending March 31, 2022, which were announced on May 14, 2021.

4.Notes on quarterly consolidated financial statements

(Change in accounting policy)

(Application of Accounting Standards for Revenue Recognition)

The Group has applied Accounting Standards for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) from the beginning of the first quarter of the consolidated fiscal year under review.

Accordingly, the Group now recognizes as revenue the amount receivable in exchange for a good or a service at the time when the promised good or the service is transferred to a customer.With this change, in terms of transactions where the Group plays a role of agency in the provision of a good or a service to a customer, the Group has changed its conventional method where the full amount received from a customer was recognized as revenue and recorded as sales to the method where the net amount is shown, calculated by deducting the amount payable to the supplier from the amount received from the customer.

With regard to the application of the Accounting Standards for Revenue Recognition, the Group has complied with the transitional measures stipulated in the proviso of Paragraph 84 of the Accounting Standards for Revenue Recognition, so that the cumulative impact of the newly applied accounting policy on the terms preceding the beginning of the first quarter of the consolidated fiscal year under review was adjusted by adding to or subtracting from retained earnings at the beginning of the first quarter of the consolidated fiscal year under review when the new account policy is newly applied. However, the Group has applied the method stipulated in Paragraph 86 of the Accounting Standards for Revenue Recognition, in terms of contracts almost all of whose revenue was recognized in compliance with the conventional method before the beginning of the first quarter of the consolidated fiscal year under review, the Group has not retroactively applied the new accounting policy. In addition, applying the method stipulated in (1), Paragraph 86 of the Accounting Standards for Revenue Recognition, in terms of the contract revisions made before the beginning of the first quarter of the consolidated fiscal year under review, accounting was based on contract conditions reflecting all the contract revisions, and the cumulative impact was adjusted by adding to or subtracting from retained earnings at the beginning of the first quarter of the consolidated fiscal year under review.

As a result, for the first quarter of the consolidated fiscal year under review, net sales decreased by 31,281 million yen, cost of sales decreased by 31,124 million yen, operating income decreased by 157 million yen, and ordinary income and profit before income taxes decrease by 238 million yen. The beginning balance of retained earnings increased by 410 million yen.

Consolidated Financial Statements

(1) Consolidated Balance Sheet

		(Millions of Yen)
	As of March 31, 2021	As of June 30, 2021
Assets
Current assets
Cash and deposits	26,874	27,525
Notes and accounts receivable - trade	46,723	31,741
Electronically recorded monetary claims - operating	4,334	5,575
Merchandise and finished goods	34,174	25,211
Work in process	34	62
Accounts receivable - other	596	29,134
Other	2,077	2,761
Allowance for doubtful accounts	(11)	(12)
Total current assets	114,804	121,999
Non-current assets
Property, plant and equipment
Buildings and structures	4,095	4,010
Accumulated depreciation	(2,433)	(2,440)
Buildings and structures, net	1,662	1,569
Machinery, equipment and vehicles	10	10
Accumulated depreciation	(10)	(10)
Machinery, equipment and vehicles, net	0	0
Tools, furniture and fixtures	2,595	2,270
Accumulated depreciation	(1,719)	(1,659)
Tools, furniture and fixtures, net	876	611
Land	1,596	1,596
Leased assets	83	46
Accumulated depreciation	(65)	(32)
Leased assets, net	17	13
Right of use assets	154	164
Accumulated depriciation	(85)	(88)
Right of use assets,net	69	76
Construction in progress	－	1
Total property, plant and equipment	4,221	3,868
Intangible assets	925	842
Investments and other assets
Investment securities	2,518	2,495
Deferred tax assets	1,136	849
Other	3,857	3,699
Allowance for doubtful accounts	(457)	(79)
Total investments and other assets	7,055	6,964
Total non-current assets	12,202	11,675
Total assets	127,006	133,674