Advanex : Flash Report (Consolidated Basis) Results for FY2023 Third quarter (Nine months ended December 31，2022)

ADVANEX INC.

Flash Report (Consolidated Basis)

Results for FY2023 third quarter(Nine months ended December 31, 2022)

		February 13, 2023
Company name:	ADVANEX INC.	Stock listings: Tokyo Stock Exchange
Code number:	5998	URLhttp://www.advanex.co.jp
Representative:	Seiya Kato, CEO & President
Inquiries:	Tetsuya Yoshihara, Director & CFO	Telephone: [phone]

Filing date of quarterly securities report:	February 14, 2023
Supplementary explanation material for quarterly financial results	Yes
Holding of presentation meeting for quarterly financial results	No
1. Performance (April 1, 2022 through December 31, 2022)	(Figures less than ¥1 million have been omitted.)

(1) Consolidated operating results (For the Nine months ended December 31.).

Percentages indicate year-on-year increase (decrease)

				Net sales			Operating	Ordinary			Net income
						Income	Income
		Millions of yen	%	Millions of yen		%	Millions	of yen	%	Millions of yen	%
Nine months ended		18,192	12.4	(138)		-		327	(6.0)		(39)	-
December 31, 2022
Nine months ended		16,181	16.6	221		-		348	116.3		(62)	-
December 31, 2021
[Note] Comprehensive income: Nine months ended December 31,2022		91 million yen
			Nine months ended December 31,2021 117 million yen
				Net income	Net income per share
				per share			after dilution
				Yen			Yen
Nine months ended		(9.69)		-
December 31, 2022
Nine months ended		(15.24)		-
December 31, 2021
(2) Consolidated financial position
				Total assets	Net assets	Equity ratio
				Millions of	yen	Millions of yen		%
As of December 31, 2022		27,200		6,972				25.6
As of March 31,2022		25,208		6,922				27.4
[Reference] Total shareholder's equity: ¥ 6,963 million yen at December 31, 2022 ¥ 6,913 million yen at March 31, 2022
2. Dividends
							Dividends per share
Record date		First quarter		Second quarter		Third quarter		Year-end	Total
	-end dividends		-end dividends		-end dividends		dividends
				Yen			Yen			Yen			Yen	Yen
Year ended			--			--			--			10.00		10.00
March 31, 2022
Year ended			--			--			--			--		--
March 31, 2023
Year ended
March 31, 2023													10.00		10.00
(forecast)

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[Note] Revisions to the latest forecast of cash dividends: No

3. Forecast of consolidated results for FY2023 (April 1, 2022 through March 31, 2023)

Percentages indicate year-on-year increase (decrease)

	Net sales	Operating	Ordinary		Net income	Net income
	income		income		(loss)		(loss) per share
	Millions of yen	%	Millions of yen	%	Millions of ye		%	Millions of		%	Yen
	n		yen
Year ended March	24,600	13.2	100	(32.5)	400	12.8	50		-	12.17
31, 2023
[Note] Revisions to the latest forecasts of consolidated results: Yes

4. Others

1. Significant changes in subsidiaries during the subject fiscal year: Yes

Additions: 0

Deletions: 0

1. Application of simplified accounting and specific accounting: No
2. Changes in accounting principles, procedures, presentations, etc.
3. 1. Changes associated with revision of accounting standards, etc: Yes
   2. Changes other than a.: No
   3. Changes in accounting estimates: No
   4. Restatement: No
4. Number of shares outstanding (Common stock)
5. 1. Number of shares outstanding at end of period (Including treasury stock) 4,153,370 shares at December 31, 2022
      4,153,370 shares at March 31, 2022
   2. Number of shares of treasury stock at end of period

45,477 shares at December 31, 2022

44,925 shares at March 31, 2022

1. Average number of shares issued and outstanding in each period: 4,108,153 shares at December 31, 2022
   4,104,369 shares at December 31, 2021

[Notes]

1. Explanation for related to implementation of the quarterly review procedures

When disclosing this Brief Report of Financial Results, the review procedures for quarterly financial statements under the Financial Instruments and Exchange Law have not been brought to completion.

2. Explanation for appropriate use of financial forecasts and other special remarks

The above-mentioned forecasts are based on the information available as of the date when this information is disclosed, as well as on the assumptions as of the disclosing date of this information related with unpredictable parameters that are probable to affect our future business performances. Our actual performance is likely to differ greatly from these estimates depending on various factors in the future.

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(Attachment)

Index

1. Qualitative Information and Financial Statements

1. Explanation of Business Results…………………………………………………………………. 4

(2)	Explanation of Financial Position…………………………………………………………………	4,5
(3)	Explanation of Consolidated Business Forecast and other Forecasts…………………..	5

2. Quarterly Consolidated Financial Statements

1. Consolidated Balance Sheets……………………………………………………………………………… 6,7
2. Consolidated Statements of Income and Consolidated Statements of

Comprehensive Income …………………………………………………………………………………… 8,9

1. Notes on Going Concern Assumptions…………………….………………………………………………10 (Segment Information)………………………….…………………………………………………….………10,11

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1．Qualitative Information on Financial Results For This Quarter

(1) Explanation of Business Results

During the first three quarters of the fiscal year under review, the global economy continued to face uncertainties, including rising energy and logistics costs, accelerating inflation, and raising interest rates at central banks in various countries, despite the relaxation of restrictions on domestic and overseas activities, including the termination of China's zero-corona policy. In the automotive industry, our main market, demand is recovering, but the shortage of semiconductors has not been resolved and downward revisions to production plans have been made one after another, and conditions have remained difficult.

Under these circumstances, in the first three quarters of the fiscal year under review, net sales increased 12.4% year on year to ¥18,192 million, operating loss was ¥138 million (¥221 million of profit in the same quarter of the previous fiscal year), ordinary income decreased 6.0% year on year to ¥327 million, and net loss attributable to owners of parent was ¥39 million (¥62 million loss in the same quarter of the previous fiscal year).

Results by business segment are as follows.

[Japan]

Sales for automotive and OA equipment decreased due to a shortage of semiconductors, while sales for precision and industrial equipment increased. As a result, net sales increased 0.9% year on year to 6,411 million yen. Segment income decreased 87.6% to ¥36 million due to higher material and energy costs.

[Americas]

Despite delays in the operation of the new Tennessee plant, net sales increased 4.3% from the same quarter of the previous year to ¥2,087 million due in part to the impact of the weaker yen. Segment loss was 746 million yen, compared with a loss of 467 million yen in the same quarter of the previous fiscal year, due in part to delays in the operation of a new Tennessee factory and the impact of soaring material costs.

[Europe]

Net sales increased 26.6% year on year to ¥1.902 billion due to a recovery in sales for medical and aircraft applications and the depreciation of the yen. Segment income increased 179.5% year on year to ¥94 million due to progress in passing on costs, despite factors such as higher material and energy costs.

[Asia]

Net sales increased 23.2% compared with the same quarter of the previous year to 7,790 million yen and segment income increased 24.2% to 457 million yen due to the strong performance of products for automotive, OA equipment and healthcare and the depreciation of the yen.

1. Explanation of Financial Position
   Financial position

Assets

Total assets at the end of the third quarter of the current fiscal year increased by 1,992 million yen from the end of the previous fiscal year to 27.2 billion yen.

In the Assets section, total current assets increased by 1.604 billion yen to 13,924 million yen. The main factors were increases of 915 million yen in cash and deposits, 699 million yen in notes and accounts receivable-trade, and 191 million yen in inventories. Total non-current assets increased 388 million yen to 13,276 million yen, while property, plant and equipment increased 435 million yen.

Liabilities

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In the Liabilities section, total liabilities were 20,228 million yen, an increase of 1,942 million yen from the end of the previous fiscal year. This was mainly due to an increase of 2,580 million yen in borrowings.

(Net assets)

In net assets, total net assets were 6,972 million yen, an increase of 49 million yen from the end of the previous fiscal year. This was mainly due to an increase of 170 million yen in foreign currency translation adjustment, despite a decrease of 81 million yen in total shareholders' equity due to the occurrence of a quarterly loss attributable to owners of parent of 39 million yen.

As a result, the equity ratio was 25.6% (27.4% at the end of the previous fiscal year).

(3) Explanation of Consolidated Business Forecast and other Forecasts

Consolidated earnings forecasts for the fiscal year ending March 2023 have been revised from those announced on May 13, 2022. For details, please refer to the "Notice Concerning Revisions to Full-Year Financial Forecasts" announced today.

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