Punch Industry : Summary of Consolidated Financial Results for the Year Ended March31,2022(Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Year Ended March 31, 2022

(Based on Japanese GAAP)

May 13, 2022

Company name:

PUNCH INDUSTRY CO., LTD.

Stock exchange listing:

Tokyo

Stock code:

6165

URL http://www.punch.co.jp/ir/

Representative:

Chief Executive Officer

Tetsuji Morikubo

Inquiries:

Chief Financial Officer

Takao Murata

TEL [phone]

Scheduled date of ordinary general meeting of shareholders:

June 23, 2022

Scheduled date to file Securities Report:

June 24, 2022

Scheduled date to commence dividend payments:

June 24, 2022

Preparation of supplementary material on financial results:

Yes

Holding of financial results meeting:

Yes

(for institutional investors and analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)

(1) Consolidated operating results

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

%

Year ended March 31, 2022

39,358

21.2

3,041

88.5

3,007

79.4

2,040

327.2

Year ended March 31, 2021

32,462

(8.2)

1,613

93.0

1,676

135.1

477

-

Note: Comprehensive income

Year ended March 31, 2022:

¥3,889 million [431.6 %]

Year ended March 31, 2021:

¥731 million

[-%]

Diluted earnings per

Profit attributable to

Ordinary profit/total

Operating profit/net

Earnings per share

owners of

share

parent/equity

assets

sales

Yen

Yen

%

%

%

Year ended March 31, 2022

93.36

84.36

14.2

11.2

7.7

Year ended March 31, 2021

21.90

21.78

4.0

6.7

5.0

Note: Share of profit (loss) of entities accounted for using equity method

Year ended March 31, 2022:

¥- million

Year ended March 31, 2021:

¥- million

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

As of March 31, 2022

28,774

16,307

56.5

737.40

As of March 31, 2021

24,702

12,436

50.2

568.26

Reference: Equity

As of March 31, 2022:

¥16,264 million

As of March 31, 2021:

¥12,398 million

(3) Consolidated cash flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Year ended March 31, 2022

2,941

(1,099)

(1,600)

4,669

Year ended March 31, 2021

2,942

(670)

(1,684)

3,962

2. Cash dividends

		Annual dividends per share		Total cash	Dividend payout	Ratio of dividends
						to net assets
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total	dividends (Total)	ratio (Consolidated)	(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Year ended March 31, 2021	-	0.00	-	2.00	2.00	43	9.1	0.4
Year ended March 31, 2022	-	4.00	-	9.00	13.00	285	13.9	2.0
Year ending March 31, 2023	-	6.50	-	6.50	13.00		13.7
(Forecast)

3. Forecast of consolidated financial results for the 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

Earnings per share

owners of parent

Six months ending

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

21,500

10.1

1,660

(6.1)

1,640

(5.5)

1,070

(15.0)

48.51

September 30, 2022

Full year

43,500

10.5

3,300

8.5

3,270

8.7

2,100

2.9

94.99

Notes

(1) Changes in significant subsidiaries during the year ended March 31, 2022

No

(changes in specified subsidiaries resulting in the change in scope of consolidation):

(2) 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 of prior period financial statements:

No

Note: For details, please refer to "3. Consolidated Financial Statements Significant Notes Thereto, (5) Notes on consolidated financial

statements, Changes in accounting policies" on page 12 of the attached material.

(3) Number of issued shares (common shares)

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

As of March 31, 2022

22,332,400 shares

As of March 31, 2021

22,122,400 shares

Number of treasury shares at the end of the period

As of March 31, 2022

275,868 shares

As of March 31, 2021

303,406 shares

Average number of shares during the period

Year ended March 31, 2022

21,858,118 shares

Year ended March 31, 2021

21,813,902 shares

(Reference) Overview of non-consolidated financial results
Non-consolidated financial results for the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
(1) Non-consolidated operating results						Percentages indicate year-on-year changes
			Net sales		Operating profit	Ordinary profit	Profit
		Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen	%
Year ended March 31, 2022		15,092	14.0	45		-	2,618		168.9	2,228	-
Year ended March 31, 2021		13,240	(13.5)	(402)		-	973		34.6	130	-
		Earnings per share	Diluted earnings per share
				Yen			Yen
Year ended March 31, 2022			101.93			92.10
Year ended March 31, 2021			5.96			5.93
(2) Non-consolidated financial position
		Total assets	Net assets		Equity ratio		Net assets per share
			Millions of yen	Millions of yen			%		Yen
As of March 31, 2022				14,235			5,860			41.0		264.54
As of March 31, 2021				12,672			3,651			28.6		166.12
Reference: Equity	As of March 31, 2022:	¥5,834 million
	As of March 31, 2021:	¥3,624 million

• Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
• Appropriate use of financial forecasts; other special items (Caution concerning forward-looking statements)
  Forward-looking statements provided in this document, including financial forecasts, are based on the information currently available to the Company and certain assumptions considered reasonable. Such statements are included without any guarantee as to their future achievement. Actual results, etc. may differ materially from the forecasts depending on various factors. For the related matters concerning the financial forecasts, please refer to "1. Overview of Operating Results, Etc., (4) Future prospects" on page 3 of the attached material.
  (The Financial Results Briefing)
  The company has scheduled an online briefing for institutional investors and analysts on Friday, May 27, 2022.

Attached Materials Index
1. Overview of Operating Results, Etc. ....................................................................................................................	2
(1)	Overview of operating results for the period ....................................................................................................	2
(2)	Overview of financial position for the period...................................................................................................	2
(3)	Overview of cash flows for the period..............................................................................................................	3
(4)	Future prospects................................................................................................................................................	3
2. Basic Policy Regarding Selection of Accounting Standards.................................................................................	3
3. Consolidated Financial Statements and Significant Notes Thereto ......................................................................	4
(1)	Consolidated balance sheets .............................................................................................................................	4
(2)	Consolidated statements of income and consolidated statements of comprehensive income...........................	6
	Consolidated statements of income ..................................................................................................................	6
	Consolidated statements of comprehensive income .........................................................................................	7
(3)	Consolidated statements of changes in equity ..................................................................................................	8
(4)	Consolidated statements of cash flows ...........................................................................................................	10
(5)	Notes on consolidated financial statements ....................................................................................................	12
	Notes related to the going concern assumption ..............................................................................................	12
	Changes in accounting policies ......................................................................................................................	12
	Segment information, etc................................................................................................................................	13
	Per share information......................................................................................................................................	15
	Significant events after the reporting period...................................................................................................	15
4. Non-consolidated Financial Statements and Significant Notes Thereto .............................................................	16
(1)	Non-consolidated balance sheets....................................................................................................................	16
(2)	Non-consolidated statements of income .........................................................................................................	18
(3)	Non-consolidated statements of changes in equity.........................................................................................	19

1

1. Overview of Operating Results, Etc.

1. Overview of operating results for the period
   The global economy during the current fiscal year saw the progress of normalization of economic and social activities led by developed countries, resulting from the balance of the measures against the novel coronavirus disease (hereinafter "COVID-19") and the relaxation of restrictions on economic activity. However, progress was halted by developments such as the emergence of new variants and their spread, the increase of geopolitical risk, and the disturbance of supply chains. Harsh conditions continue. In the manufacturing sector, the future remains uncertain for reasons including the marked increase of crude oil and raw material costs and the shortage of certain components, especially semiconductor components.
   In such an environment, the Group worked to rebuild financially from the negative effects of the prolonged US-China trade friction and COVID-19 with its Mid-term Business Plan "Value Creation (VC) 2020 Plus" that had started in April 2020. The Group achieved its goal of a V-shaped recovery.
   The consolidated operating results for the current fiscal year surpassed those of the previous fiscal year in all regions, riding on the general conditions of recovery from the spread of COVID-19. Net sales amounted to ¥14,020 million (up 13.6% year on year) for Japan; ¥20,956 million (up 24.1% year on year) for China; ¥1,740 million (up 26.4% year on year) for Southeast Asia; and ¥2,641 million (up 42.2% year on year) for Europe and the United States. This brought consolidated net sales to ¥39,358 million (up 21.2% year on year).
   All results by industry also surpassed those of the previous fiscal year. The results were ¥16,442 million (up 20.2% year on year) for automobile; ¥8,043 million (up 27.4% year on year) for electronic devices & semiconductors; ¥4,192 million (up 7.8% year on year) for consumer electronics & precision equipment; and ¥10,679 million (up 24.5% year on year) for other.
   As for profits, the Company posted the highest since it was listed. The rise in selling, general and administrative expenses accompanying the increase in sales was countered by the improved cost rate due to effects of increased revenue and raised factory operation and other factors such as reductions for depreciation as a result of recording impairment losses of past years. Operating profit was ¥3,041 million (up 88.5% year on year); ordinary profit was ¥3,007 million (up 79.4% year on year); and profit attributable to owners of parent was ¥2,040 million (up 327.2% year on year).
2. Overview of financial position for the period

Assets

Total assets as of the end of the current fiscal year amounted to ¥28,774 million, an increase of ¥4,071 million compared with the end of the previous fiscal year. This was mainly due to an increase of trade receivables.

Liabilities

Total liabilities amounted to ¥12,466 million, an increase of ¥200 million compared with the end of the previous fiscal year. This was mainly due to an increase in trade payables and a decrease in interest- bearing debt.

Net Assets

Total net assets amounted to ¥16,307 million, an increase of ¥3,870 million compared with the end of the previous fiscal year. This was mainly due to an increase of retained earnings as a result of recording profit attributable to owners of parent and an increase of foreign currency translation adjustment.

2