Ohashi Technica : Consolidated Financial Results for the Three Months Ended June 30, 2021

This document is a translation of the original in Japanese prepared for the sole purpose of convenience for readers outside Japan. In the event of any discrepancies between this translation and the Japanese original, the latter shall prevail.

Consolidated Financial Results

for the Three Months Ended June 30, 2021 [J-GAAP]

	August 5, 2021
Name of listed company: OHASHI TECHNICA INC.	Listed exchange: Tokyo Stock Exchange
Securities code: 7628	URL: https://www.ohashi.co.jp/en/

Representative: Mamoru Shibasaki, President & CEO

Contact: Yoshiji Nakamura, Director and General Manager, Business Promotion Division Telephone: [phone]

Scheduled date for filing of quarterly securities report: August 6, 2021

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing materials on quarterly financial results: None

Holding of quarterly financial results briefing: None

(Amounts of less than millions of yen are truncated)

1. Consolidated performance for the three months ended June 30, 2021 (April 1, 2021-June 30, 2021)

(1) Consolidated operating results			(% of change from the same quarter of the previous year)
	Net sales	Operating profit	Ordinary profit	Profit attributable to
	owners of parent
	Million yen	%	Million yen	%	Million yen	%		Million yen	%
Three months ended	8,653		31.8	754	102.9	852	109.2		604	118.3
June 30, 2021
Three months ended	6,564		(29.9)	372	(60.3)	407	(59.5)		276	(62.3)
June 30, 2020
Note: Comprehensive income	Three months ended June 30, 2021: 1,595 million yen [-%]
	Three months ended June 30, 2020: (102) million yen [-%]
	Basic earnings Diluted earnings
	per share			per share
			Yen	Yen
Three months ended	42.64		ʷ
June 30, 2021
Three months ended	18.81		ʷ
June 30, 2020

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; March 31, 2020) has been applied from the beginning of the three months ended June 30, 2021, and the figures for the three months ended June 30, 2021, are shown after application of this accounting standard.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of June 30, 2021	43,713	32,716	73.8
As of March 31, 2021	42,138	31,672	74.2

Reference: Equity As of June 30, 2021: 32,279 million yen

As of March 31, 2021: 31,266 million yen

2. Dividends

Annual dividends

End of 1Q

End of 2Q

End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2021

ʷ

20.00

ʷ

32.00

52.00

Year ended March 31, 2022

ʷ

Year ending March 31,

26.00

ʷ

31.00

57.00

2022 (forecast)

Note 1.	Revision from the most recent announcement of cash dividends forecasts: None
Note 2.	Breakdown of year-end dividend for the year ending March 31, 2022 (forecast)
	Ordinary dividend: 26.00 yen	Commemorative dividend for the Company's 70th anniversary: 5.00 yen

3. Consolidated performance forecast for the year ending March 31, 2022 (April 1, 2021-March31, 2022) (Percentages show year-on-year changes)

			Net sales			Operating profit		Ordinary profit		Profit attributable to		Basic earnings
							owners of parent		per share
			Million yen	%		Million yen	%		Million yen	%		Million yen	%		Yen
	Full year		36,000		20.9		2,700		28.2		2,900		27.1		2,000		29.9		141.20
Note:	Revision from the most recent announcement of cash dividends forecasts: None

*Notes

1. Changes in significant subsidiaries during the period (changes of specified subsidiaries resulting in changes in the scope of consolidation): None
2. Application of particular accounting procedures to the preparation of quarterly financial statements: None
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to revisions in accounting standards, etc.: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None

Note: For details, please see "(3) Notes to Quarterly Consolidated Financial Statements" under "2. Quarterly Consolidated Financial Statements and Principal Notes" on page 8 of the attachment.

1. Number of shares issued (common shares)

1. Number of shares issued at the end of the period (including treasury shares):
2. Number of treasury shares at the end of the period:
3. Average number of shares during the period:

June 30, 2021:	14,759,080 shares
June 30, 2020:	14,759,080 shares
June 30, 2021:	594,405 shares
June 30, 2020:	534,274 shares
Three months ended June 30, 2021:	14,170,288 shares
Three months ended June 30, 2020:	14,719,100 shares

• These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.

*Guide to appropriate use of performance forecasts and other notes Notes on forward-looking descriptions, etc.

Forward-looking descriptions including performance forecasts in this document are based on information currently available to the Company and certain assumptions deemed reasonable, and are not a guarantee on their realization. Actual results, etc. may differ significantly due to various factors. For more notes on the use of performance forecasts, please see "(2) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information" under "1. Qualitative Information on Quarterly Financial Results" on page 3 of the attachment.

Table of contents to the attachment
1. Qualitative information on quarterly financial results ...........................................................................................................	2
(1)	Explanation of operating results......................................................................................................................................	2
(2)	Explanation of consolidated financial results forecast and other forward-looking information .....................................	3
2. Quarterly consolidated financial statements and principal notes ...........................................................................................	4
(1)	Quarterly consolidated balance sheets..............................................................................................................................	4
(2)	Quarterly consolidated statements of income and comprehensive income ......................................................................	6
	Quarterly consolidated statements of income for the three months ended June 30, 2021...............................................	6
	Quarterly consolidated statements of comprehensive income for the three months ended June 30, 2021......................	7
(3)	Notes to quarterly consolidated financial statements .......................................................................................................	8
	Notes on going concern assumption................................................................................................................................	8
	Notes in case of significant changes in shareholders' equity..........................................................................................	8
	Changes in accounting policies.......................................................................................................................................	8
	Additional information ....................................................................................................................................................	9
	Segment information, etc...............................................................................................................................................	10
	Significant subsequent events........................................................................................................................................	11
3. Other ....................................................................................................................................................................................	11

1

1. Qualitative information on quarterly financial results

1. Explanation of operating results

The world economy moved gradually toward recovery during the three months ended June 30, 2021, mainly due to the proactive economic policies by governments against COVID-19 and the resumption of economic activity along with vaccine access. However, the future remains uncertain due to resurgences of infections caused by the proliferation of new coronavirus variants, interruptions in production activity over a wide range of industries caused by semiconductor shortages, and tight global container availability caused by disruptions in ocean shipping. The Japanese economy was on the road to recovery after hitting bottom, but the economic environment is still harsh and weighted down by factors such as the government's declaration of another state of emergency due to the resurgence of infections.

In the automotive industry in which OHASHI TECHNICA INC. (the "Company") and its subsidiaries (collectively, the "Group") operate business, both overseas and domestic production at automobile manufacturers increased from a year earlier when production significantly declined due to the effects of COVID-19. Overseas, where the quarter under review is January 1, 2021-March 31, 2021, production rebounded in China where COVID- 19 caused lockdown in the previous year, which led overall production overseas to increase. However, with the semiconductor supply shortage and ocean shipping at a standstill since the beginning of the year, production at manufacturers that are major clients of the Group in the U.S. declined from the previous year. Except for China, overall production overseas has not recovered to pre-COVID levels, and production has not fully recovered. In Japan, where the quarter under review is April 1, 2021-June 30, 2021, automobile production increased, mainly because production at automobile manufacturers has recovered from last year's steep decline, despite production adjustments in response to the semiconductor supply shortage.

Under these circumstances, the Group strived to respond quickly to changes in the production activity of clients and to strengthen its business foundations. As a result, consolidated net sales increased year-on-year, as automobile manufacturers that are major clients of the Group recovered from the previous year's production declines. Our consolidated operating profit also increased year-on-year, owing to an increase in net sales across all regions except the U.S., despite a rise in overseas logistics costs.

In the three months ended June 30, 2021, on a consolidated basis, the Company posted net sales of 8,653 million yen (up 31.8% year on year), operating profit of 754 million yen (up 102.9% year on year), ordinary profit of 852 million yen (up 109.2% year on year) and profit attributable to owners of parent of 604 million yen (up 118.3% year on year).

Application of the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29; March 31, 2020) (the "Revenue Recognition Standard") caused net sales and cost of sales both to decrease by 52 million yen. There was no impact on the various profit results.

Operating results by segment are as described below. (Segment profit is adjusted with operating profit on the quarterly consolidated statements of income.)

[Japan]

Despite the effects of production adjustments due to semiconductor supply shortages, automobile manufacturers of our major clients recovered from the production decline following the spread of COVID-19 in the previous year. As a result, net sales were 4,679 million yen (up 53.3% year on year). Segment profit was 392 million yen (up 600.7% year on year) due to the increase in net sales.

Application of the Revenue Recognition Standard, caused net sales to decrease by 52 million yen. There was no impact on segment profit.

[Americas]

Production at automobile manufacturers in the U.S. was impacted by the worldwide semiconductor supply shortage and a standstill in ocean shipping, resulting in production at lower levels than the previous year. Net sales were 1,745 million yen (down 5.4% year on year). Segment profit was 72 million yen (down 44.2% year on year) due to the decline in net sales and higher ocean shipping costs.

[China]

In the previous year, production was heavily impacted by lockdowns due to the spread of COVID-19, but production rebounded and was significantly higher than in the previous year. As a result, net sales were 1,270 million yen (up 67.4% year on year). Segment profit was 206 million yen (up 116.9% year on year) owing to the increase in net sales and the improvement of manufacturing costs due to production recovery.

2