OPTEX : Summary of Financial Results (Consolidated) for the Second Quarter of Fiscal Year 2022

(Millions of yen rounded down) (Percentages indicate changes from the same period in the previous fiscal year.)

Profit attributable to

owners of parent

Aug.8,2022

Summary of Financial Results (Japan GAAP)[Consolidated]

For the Second Quarter of Fiscal Year Ending December 31,2022

Company name:	OPTEX GROUP CO.,LTD.
Stock exchange listing:	Tokyo Stock Exchange
Stock code:	6914
URL:	https://www.optexgroup.co.jp/en/
Representative :	Isamu Oguni, President / CEO
Contact:	Hiroyuki Onishi, Director / CFO
	Tel.[phone]
Scheduled date for filing of securities report:	Aug.10,2022
Scheduled date for dividend payment:	Sep.2,2022

Supplementary materials to the quarterly financial statements have been prepared: Yes

Presentation will be held to explain the quarterly financial statements: Yes

1. Consolidated financial results for the six months ended Jun. 30,2022 (From Jan.1 to Jun.30, 2022)

(1) Consolidated operating results

	Net sales		Operating profit	Ordinary profit
Six months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%
Jun. 30,2022	27,241	19.7	3,590	42.4	4,297	51.2
Jun. 30,2021	22,750	36.7	2,520	221.8	2,841	225.6

(Note) Comprehensive income:	Six months ended Jun. 30,2022: 4,393 million yen 65.7%
	Six months ended Jun. 30,2021: 2,651 million yen - %
	Basic earnings	Diluted earnings
	per share	per share
Six months ended	Yen	Yen
Jun. 30,2022	87.85	87.29
Jun. 30,2021	53.13	52.85

(2) Consolidated financial position
	Total assets	Net assets
As of	Millions of yen	Millions of yen
Jun. 30,2022	61,543	39,256
Dec. 31,2021	57,769	35,360

(Reference) Shareholders' equity:	As of Jun. 30,2022: 38,937 million yen
	As of Dec. 31,2021: 35,072 million yen
2. Dividends
		Dividends per share
(Base date)	End of 1Q	End of 2Q	End of 3Q	Year-end
	Yen	Yen		Yen

Millions of yen	%
3,120	62.4
1,921	227.7

Shareholder's

equity ratio

%

63.3

60.7

Annual (Total)

YenYen

Fiscal year ended Dec. 31,2021	-	15.00	-	15.00	30.00
Fiscal year ending Dec. 31,2022	-	18.00
Fiscal year ending Dec. 31,2022
		-	18.00	36.00
(Forecast)

(Note)Revisions of the forecast most recently announced: None

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3.Forecast of consolidated results for the fiscal year ending Dec. 31, 2022 (From Jan. 1 to Dec. 31, 2022)
					(Percentages indicate changes from the previous year.)
	Net sales		Operating income	Ordinary income	Profit attributable	Net income
		to owners of parent	per share
Fiscal year ending	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Dec. 31,2022 (Forecast)	53,000	15.6	6,000	29.6	6,100	18.9	4,600	22.3	129.49
(Note)Revisions of the forecast most recently announced: None

4. Others

(1) Material changes in subsidiaries during this period

(changes in scope of consolidations resulting from change is subsidiaries): None

1. Applying of specific accounting of the consolidated quarterly financial statements: None
2. Changes in accounting policies, accounting estimates and retrospective restatements

1. Changes in accounting policies based on revisions of accounting standards: Yes
2. Changes in accounting policies other than ones based on revisions of accounting standards: None
3. Changes in accounting estimates: None
4. Retrospective restatements: None

1. Number of issued and outstanding shares (common shares)

1. Number of issued and outstanding shares at the end of fiscal year (including treasury shares)

As of Jun. 30, 2022:	37,735,784 shares
As of Dec. 31, 2021:	37,735,784 shares
(b) Number of treasury shares at the end of fiscal year
As of Jun. 30, 2022:	2,210,451 shares
As of Dec. 31, 2021:	2,214,684 shares
(c) Average number of shares during the period
Six months ended Jun. 30, 2022:	35,523,474 shares
Six months ended Jun. 30, 2021:	36,161,241 shares

• Quarterly earnings reports are exempt from the quarterly review procedures to be conducted by a certified public accountant or an audit corporation.

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Qualitative Information Related to Financial Statements for the Quarter under Review

(1) Explanation Concerning Operating Results

Based on its corporate philosophy, "aiming to become a corporate group full of venture spirit," the Group has established a management policy of curbing indirect costs on a Group-wide basis and accelerating the business development and profit growth of companies in the Group by strengthening and enhancing headquarters functions.

As a focal strategy for the current fiscal year, the Group has been working to increase the cost efficiency and financial strength of the entire Group by improving the management function of its head office to promote the flexible business development of Group companies. The Group is also bolstering business alliances among its member companies with an aim to accelerate the creation of synergy.

In the first six months of the consolidated fiscal year under review, net sales increased 19.7% year on year, to 27,241 million yen, mainly reflecting significant growth in existing main businesses and the effects from the consolidation of a new operating company. On the profit side, operating profit was 3,590 million yen, up 42.4% year on year. The sales growth resulted in a rise in gross profit that far exceeded the rise in selling, general and administrative expenses. Ordinary profit stood at 4,297 million yen, up 51.2% year on year mainly due to higher foreign exchange gains. Profit attributable to owners of parent was 3,120 million yen, up 62.4% year on year.

The business results for each segment are described below.

• SS (Sensing Solution) Business

Net sales for the SS Business came to 11,509 million yen (up 15.5% year on year) and operating profit was 1,554 million yen (up 29.7% year on year).

Net sales for the security sensors were 7,956 million yen (up 16.5% year on year). In Japan, performance declined due primarily to delays in product supply caused by component shortages. Meanwhile, net sales in overseas operations significantly exceeded the year-ago level, reflecting steady sales of outdoor sensors for large-scale critical facilities in the United States and Europe.

Net sales for the automatic door sensors amounted to 2,493 million yen (up 16.6% year on year), reflecting steady domestic sales as well as significant growth in overseas sales.

• IA (Industrial Automation) Business

In the IA Business, net sales came to 15,036 million yen (up 23.1% year on year) and operating profit was 2,123 million yen (up 46.9% year on year).

Net sales for FA-related products amounted to 5,589 million yen (up 16.4% year on year), the result of strong demand from the semiconductor, electronic component and secondary battery industries and significant growth in overseas sales, mainly in China.

Net sales for the MVL-related products were 6,664 million yen (up 17.6% year on year), reflecting steady growth in sales for the semiconductor and electronic component industries.

Net sales for the IPC-related products amounted to 2,086 million yen (up 19.3% year on year), the consequence of steady sales of industrial computers for semiconductor manufacturing equipment.

Net sales for MECT-related products stood at 696 million yen. In the first quarter of the consolidated fiscal year under review, the Group included Mitsutec Co., Ltd., which was consolidated as a subsidiary in November 2021, in the MECT-related segment of the IA Business.

• • MECT : Mechatronics
• EMS (Electronics Manufacturing Service) Business

In the EMS Business, net sales to unaffiliated customers were 422 million yen (up 28.4% year on year), attributable to an increase in projects for the electronic contract manufacturing service. Meanwhile, operating profit decreased to 111 million yen (down 0.5% year on year), reflecting an increase in the cost ratio caused by foreign exchange fluctuations.

1. Explanation Concerning Financial Position
2. • Conditions of assets, liabilities and net assets (Assets)
     Total assets amounted to 61,543 million yen at the end of the first six months under review, which was an increase of 3,773 million yen from the end of the previous fiscal year.

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Current assets increased 3,742 million yen to total 46,286 million yen. The increase reflected an increase in the inventories of raw materials and supplies of 1,846 million yen, coupled with a rise in notes and accounts receivable - trade of 1,142 million yen due to higher net sales.

Non-current assets increased 31 million yen, to 15,256 million yen. This was chiefly due to an increase of 262 million yen in property, plant and equipment such as buildings and structures, which more than offset decreases of 131 million yen in investments and other assets such as investment assets and 99 million yen in intangible assets such as customer-related assets mainly attributable to amortization.

(Liabilities)

Total liabilities stood at 22,286 million yen at the end of the first six months under review, which was a decrease of 122 million yen from the end of the previous fiscal year. This was primarily a result of a decrease of 1,503 million yen in current liabilities such as short-term borrowings, despite an increase of 1,381 million yen in non-current liabilities such as long-term borrowings.

(Net assets)

Net assets amounted to 39,256 million yen at the end of the first six months under review, which was an increase of 3,895 million yen from the end of the previous fiscal year. This resulted mainly from an increase of 2,587 million yen in retained earnings and a rise of 1,348 million yen in foreign currency translation adjustment.

• Conditions of cash flows

Cash and cash equivalents (hereinafter referred to as "cash") amounted to 17,993 million yen at the end of the first six months under review, which was an increase of 873 million yen from the end of the previous fiscal year.

The conditions of the respective cash flows during the first six months under review and their main causes are as follows.

(Cash flows from operating activities)

Net cash provided by operating activities was 1,487 million yen (compared with 2,298 million yen in the same period of the previous fiscal year). This result mainly reflected an increase in cash due to the securing of 4,300 million yen in profit before income taxes, which more than offset a decrease in cash due to an increase of 1,399 million yen in inventories, 1,371 million yen in income taxes paid and an increase of 595 million yen in notes and accounts receivable - trade.

(Cash flows from investing activities)

Net cash used in investing activities was 690 million yen (compared with net cash of 636 million yen used in such activities in the same period of the previous year). This was chiefly attributable to a decrease in cash due to the purchase of property, plant and equipment of 417 million yen and the purchase of intangible assets of 125 million yen.

(Cash flows from financing activities)

Net cash used in financing activities came to 603 million yen (compared with net cash of 1,079 million yen used in such activities in the same period of the previous fiscal year). This result mainly reflected a decrease in cash caused by the payment of 1,881 million yen as a result of a decrease in short-time loans and 532 million yen in dividends paid, despite the proceeds of 2,100 million yen from long-term borrowings.

1. Management's discussion of consolidated operating results forecast and other forecasts

Financial results for the first six months of the consolidated fiscal year under review were strong primarily because sales in Europe and the United States and those in Asia surpassed expectations in the SS Business and IA Business, respectively, coupled with the weakening of yen exchange rates.

While recent strong inquiries are expected to continue, the impact of the present business environment, such as surges in raw material prices and logistics costs due to the globally tight supply-and-demand condition of semiconductors and electronic parts, among other items, on the Group's business activities is extremely uncertain. In light of this, the Group has decided to leave the previously released full-year forecast unchanged at this time. If the Group decides that the full-year forecast needs to be revised, it will promptly announce the revision.

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Consolidated Quarterly Financial Statements

Consolidated Quarterly Balance Sheets

		(Millions of yen)
	As of December 31, 2021	As of June 30, 2022
Assets
Current assets
Cash and deposits	17,120	17,993
Notes and accounts receivable - trade	10,444	11,586
Securities	133	323
Merchandise and finished goods	3,970	4,414
Work in process	1,894	1,550
Raw materials and supplies	5,771	7,518
Income taxes receivable	207	110
Other	3,060	2,855
Allowance for doubtful accounts	△57	△66
Total current assets	42,544	46,286
Non-current assets
Property, plant and equipment
Buildings and structures, net	3,308	3,511
Machinery, equipment and vehicles, net	333	398
Tools, furniture and fixtures, net	836	761
Land	2,480	2,520
Construction in progress	35	64
Total property, plant and equipment	6,993	7,256
Intangible assets
Patent right	362	320
Trademark right	411	379
Customer relationships	642	568
Goodwill	1,052	1,090
Other	735	746
Total intangible assets	3,204	3,105
Investments and other assets
Investment securities	2,117	2,000
Long-term loans receivable	373	439
Deferred tax assets	1,954	1,846
Other	612	640
Allowance for doubtful accounts	△31	△32
Total investments and other assets	5,026	4,895
Total non-current assets	15,224	15,256
Total assets	57,769	61,543

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