Mimaki Engineering : Consolidated Financial Results for the Three Months Ended June 30, 2022 (Under Japanese GAAP)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

August 9, 2022

Consolidated Financial Results

for the Three Months Ended June 30, 2022

(Under Japanese GAAP)

Company name:	MIMAKI ENGINEERING CO., LTD.
Listing:	Tokyo
Securities Code:	6638
URL:	https://ir-eng.mimaki.com/
Representative:	Kazuaki Ikeda, President
Inquiries:	Koji Shimizu, Executive Director and General Manager of Corporate Planning
	Division
TEL:	0268 (80) 0058

Scheduled date to file Quarterly Securities Report:	August 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results meeting:	No

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
		Net sales	Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%
Three months ended		15,975	13.4	856	10.3	903		13.1	674	2.4
June 30, 2022
Three months ended		14,091	78.4	776	-	798		-	658	-
June 30, 2021
Note: Comprehensive income	Three months ended June 30, 2022	¥1,616 million	[88.7%]
		Three months ended June 30, 2021	¥856 million	[-%]
	Basic earnings per	Diluted earnings
		share		per share
			Yen		Yen
Three months ended			23.44		23.43
June 30, 2022
Three months ended			22.33		22.31
June 30, 2021

(2) Consolidated financial position

	Total assets		Net assets	Equity-to-asset ratio
	Millions of yen		Millions of yen	%
As of June 30, 2022	65,527		20,117	30.6
As of March 31, 2022	60,857		18,716	30.6
Reference: Equity	As of June 30, 2022		¥20,028 million
	As of March 31, 2022		¥18,633 million

2. Cash dividends

		Annual dividends per share
	First	Second		Third		Fiscal		Total
	quarter-end	quarter-end		quarter-end		year-end
	Yen	Yen		Yen		Yen		Yen
Year ended	-	7.50		-		7.50	15.00
March 31, 2022
Year ending	-
March 31, 2023
Year ending		7.50		-		7.50	15.00
March 31, 2023
(Forecast)

Note: Revision of cash dividend forecast most recently announced: No

3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

(% Display is the year-on-year rate of increase/decrease for the full year and the year-on-year rate for the quarter)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic
		earnings per
		owners of parent
								share
	Millions of		%	Millions of	%	Millions of	%	Millions of	%	Yen
	yen		yen	yen	yen
Second quarter	34,200		18.7	1,570	(7.2)	1,540	(9.5)	1,160	(25.9)	40.31
(cumulative)
Full year	69,100		16.1	3,130	21.8	3,020	12.3	2,170	(7.6)	75.41
Note: Revision of consolidated financial results forecast most recently announced: No

* Notes

1. Changes in significant subsidiaries during the three months ended June 30, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation): No
2. Application of special accounting for preparing quarterly consolidated financial statements: No
3. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
   Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
   Changes in accounting policies due to other reasons: No
   Changes in accounting estimates: No
   Restatement: No
   Note: For details, please refer to "Quarterly consolidated financial statements and significant notes thereto, (3) Notes on quarterly consolidated financial statements, (Changes in accounting policies)" on page 10 of the attached materials.
4. Number of issued shares (common shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares)

As of June 30, 2022	32,040,000 shares
As of March 31, 2022	32,040,000 shares

(ii) Number of treasury shares at the end of the period

As of June 30, 2022	3,263,767 shares
As of March 31, 2022	3,264,767 shares

(iii) Average number of shares during the period (cumulative from the beginning of the fiscal year)

Three months ended June 30, 2022	28,776,233 shares
Three months ended June 30, 2021	29,494,233 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters
  The forecasts and other forward-looking statements in this report are based on currently available information and certain assumptions determined as rational. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. In addition, actual business results may differ significantly due to various factors. Please refer to "Qualitative information on quarterly consolidated financial results, (3) Explanation of consolidated financial results forecasts and other forward-looking statements" on page 4 of the attached materials for the conditions that are the premise of the business forecast and precautions when using the business forecast.

Table of contents of attached materials
	Index
1. Qualitative information on quarterly consolidated financial results .........................................................	2
(1)	Explanation of operating results.........................................................................................................	2
(2)	Explanation of financial position........................................................................................................	4
(3)	Explanation of consolidated financial results forecasts and other forward-looking statements .........	4
2. Quarterly consolidated financial statements and significant notes thereto ...............................................	6
(1)	Quarterly consolidated balance sheets................................................................................................	6
(2)	Quarterly consolidated statements of income and consolidated statements of
	comprehensive income .......................................................................................................................	8
	Quarterly consolidated statements of income (cumulative) ...............................................................	8
	Quarterly consolidated statements of comprehensive income (cumulative) ......................................	9
(3)	Notes on quarterly consolidated financial statements ......................................................................	10
	(Note on going concern assumption)................................................................................................	10
	(Notes on significant changes in the amount of shareholders' equity) .............................................	10
	(Changes in accounting policies)......................................................................................................	10
	(Additional information) ..................................................................................................................	10
	(Contingent debt)..............................................................................................................................	10

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1. Qualitative information on quarterly consolidated financial results

1. Explanation of operating results
   During the three months ended June 30, 2022 (hereinafter referred to as "the period under review"), amid the continuing impact of difficulties in procuring parts and raw materials, the global economy continued to face difficult conditions, including soaring energy and food prices and high levels of inflation triggered by Russia's invasion of Ukraine, as well as lockdowns within China. In Japan, while restrictions due to the spread of the novel coronavirus disease (COVID-19) were eased and the economy showed signs of picking up, the pace of the recovery remained sluggish and unpredictable due to growing uncertainty over the future caused by rising inflation and the rapid depreciation of the yen.
   In this environment, the Group has continued to launch new products and expand sales, develop its business in anticipation of rapid changes in the market environment and customer needs, and build a foundation to improve profitability, based on the priority measures set forth in the "Mimaki V10" mid- to long-term growth strategy established in December 2020. During the period under review, in response to a recovery in demand and future business expansion, the Company established the new Maruko Factory in Ueda-shi, Nagano, for the purpose of increasing production capacity and strengthening development capability.
   For net sales during the period under review, although there were negative impacts from the shortage of parts and raw materials, prolonged transportation lead times, and other factors, as well as the sales decline in Europe due to the Russia-Ukraine crisis and the negative impact of the lockdown in China on production and sales, in the SG, IP, and TA markets, sales of new products announced and launched in the previous fiscal period grew steadily, while sales of existing main products were generally firm despite supply constraints on main units. Sales of ink and spare parts were also strong due to increased operation of printer at customer locations. In addition to the above, the positive effect of the yen's depreciation on foreign exchange resulted in a significant increase in sales. In terms of profit, the cost of sales ratio remained at the same level as the same period of the previous fiscal year due to the positive effect of the yen's depreciation, as well as progress in revising selling prices to cope with overall cost increases caused by high material and transportation costs and inflationary pressures. At the same time, SG&A expenses increased in line with increased sales activities.
   As a result of the above, for the period under review, the Group posted net sales of 15,975 million yen (up 13.4% year on year), operating profit of 856 million yen (up 10.3% year on year), ordinary profit of 903 million yen (up 13.1% year on year), and profit attributable to owners of parent of 674 million yen (up 2.4% year on year)
   In addition, the major exchange rates (average rates from April 2022 to June 2022) for the period under review were 1 US$ = 129.57 yen (109.49 yen in the same period of the previous fiscal year) and 1 EUR = 138.10 yen (131.95 yen in the same period of the previous fiscal year).

The operating results by segment are as follows. (Japan, Asia and Oceania)

Net sales were 6,801 million yen (up 12.2% year on year). In Japan, net sales increased significantly as a result of strong sales of both main units and ink for the IP market, mainly for new products, and ink sales for the SG and TA markets also grew due to increased operations by customers, reflecting a gradual pickup in economic activity. In Asia and Oceania, while China was significantly affected by the lockdown, sales in Thailand, Indonesia, India, and other countries grew substantially, resulting in an overall increase in sales.

(North America and Latin America)

Net sales were 4,497 million yen (up 34.9% year on year). In North America, although the impact of rapidly rising inflation is gradually becoming apparent, sales to the SG, IP, and TA markets remained strong for both main units and ink, and in addition, the effect of yen depreciation on foreign exchange resulted in a substantial increase in sales. In Latin America, sales increased substantially, mainly in Brazil and Mexico.

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