Roland : Quarterly Securities Report For the First Quarter of the 53rd Fiscal Year

Quarterly Securities Report

For the First Quarter of the 53rd Fiscal Year (January 1, 2024 through March 31, 2024)

Roland Corporation

1. This is an English translation of the Quarterly Securities Report (Shihanki Hokokusho), which was produced based on Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan and was filed via the Electronic Disclosure for Investors' NETwork (EDINET) system as set forth in Article 27-30-2 of the same act. The translation includes a table of contents and pagination that are not included in the electronic filing.
2. Appended to the back of this document are English translations of the independent auditor's Quarterly Review Report attached to the Quarterly Securities Report when it was filed using the aforementioned method, and the Confirmation Note that was filed at the same time as the Quarterly Securities Report.
3. 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.
4. • 1 -

	Table of Contents
		Page
Quarterly Securities Report for the First Quarter of the 53rd Fiscal Year
Cover	3
Section 1 Company Information	4
Item 1. Overview of Company	4
1.	Key Financial Data	4
2.	Description of Business	4
Item 2. Overview of Business	5
1.	Business Risks	5
2.	Management's Discussion and Analysis of Financial Position, Operating Results and Cash Flows	5
3.	Material Contracts, etc	6
Item 3. Information about Reporting Company	7
1.	Company's Shares, etc	7
2.	Directors and Other Officers	8
Item 4. Financial Information	9
1.	Quarterly Consolidated Financial Statements	10
2.	Other information	17
Section 2 Information about Reporting Company's Guarantor, etc	18
Independent Auditor's Quarterly Review Report ………………………………………………………………………………………. 19
Confirmation Note………………………………………………………………………………………………………………………. 21

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Cover

Document title	Quarterly Securities Report
Clause of stipulation	Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act
Place of filing	Director, Kanto Local Finance Bureau
Filing date	May 10, 2024
Quarterly accounting period	The first quarter of the 53rd fiscal year (January 1, 2024 through March 31, 2024)
Company name	Roland Kabushiki Kaisha
Company name in English	Roland Corporation
Title and name of representative	Gordon Raison, CEO and Representative Director
Address of registered headquarters	2036-1 Nakagawa, Hosoe-cho,Hamana-ku ,Hamamatsu-shi, Shizuoka
Telephone number	[phone]
Name of contact person	Yuichi Hakamata, CFO and Executive Officer
Nearest place of contact	2036-1 Nakagawa, Hosoe-cho,Hamana-ku ,Hamamatsu-shi, Shizuoka
Telephone number	[phone]
Name of contact person	Yuichi Hakamata, CFO and Executive Officer
Place for public inspection	Tokyo Stock Exchange, Inc.
	(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)

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Section 1 Company Information

Item 1. Overview of Company

1. Key Financial Data

Fiscal year		52nd	53rd	52nd
	Three-month period	Three-month period
Accounting period		(January 1, 2023 through	(January 1, 2024 through	(January 1, 2023 through
	March 31, 2023)	March 31, 2024)	December 31, 2023)
Net sales	(million yen)	22,861	22,083	102,445
Ordinary profit	(million yen)	1,864	1,122	11,154
Profit attributable to owners of parent	(million yen)	1,408	980	8,151
Comprehensive income	(million yen)	1,758	3,165	10,799
Net assets	(million yen)	33,329	40,989	40,114
Total assets	(million yen)	73,538	79,830	80,969
Basic earnings per share	(yen)	51.61	35.63	297.97
Diluted earnings per share	(yen)	50.92	35.28	294.33
Equity-to-asset ratio	(%)	44.9	51.0	49.2
Net cash provided by (used in)	(million yen)	5,286	3,229	15,428
operating activities
Net cash provided by (used in)	(million yen)	(632)	(16)	(3,576)
investing activities
Net cash provided by (used in)	(million yen)	(5,125)	(3,603)	(8,668)
financing activities
Cash and cash equivalents	(million yen)	9,962	12,259	12,883
at end of period
Notes: 1. Non-consolidated financial data are not presented as the Company prepares quarterly consolidated financial statements.

2. Basic earnings per share and diluted earnings per share are computed using the average number of shares outstanding during the period, which is calculated by subtracting the number of treasury shares from these shares. These treasury shares include the treasury shares remaining in Board Benefit Trust, Employee Stock Ownership Plan Trust and Employee Shareholding Association-type ESOP Trust.

2. Description of Business

There were no significant changes in the business in which the Company and its subsidiaries and associates (collectively, the "Group") operate during the three months ended March 31, 2024.

No changes were made to major subsidiaries and associates.

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Item 2. Overview of Business

1. Business Risks

During the three months ended March 31, 2024 (hereinafter the "period under review"), among the matters related to Overview of Business and Financial Information stated in this Quarterly Securities Report, no major risks that might have a material impact on the financial position, operating results and cash flows of the Group have been recognized by the management. There were no significant changes in the matters related to "Business and other risks" stated in the Annual Security Report for the previous fiscal year.

2. Management's Discussion and Analysis of Financial Position, Operating Results and Cash Flows

This document contains forward-looking statements, which are based on the Group's estimates and assumptions made as of the end of the period under review.

1. Business performance
   During the period under review, the global economic environment surrounding the Group remained uncertain due to several factors such as geopolitical risks occurred between Russia and Ukraine, Israel and Palestine, persistently high prices of commodities and interest rates worldwide, the prolonged depreciation of the Japanese Yen, and economic stagnation in China.
   Demand for electronic musical instruments was affected by a reactionary decline after stay-at-home demand as well as by rising prices in some product categories. Meanwhile, shipments from the Group to dealers during the period under review remained sluggish, compared to the same period of the previous fiscal year. This was partly because it was time consuming to adjust the supply-and-demand imbalance triggered by supply chain disruption during the COVID-19 pandemic, resulting in excess dealer inventories. There was also an impact of a reactionary decline after the shipments of backlogged orders made in the same period of the previous fiscal year. These impacts of the adjustment were generally in line with our expectations, and they are anticipated to gradually come to an end during the second quarter this fiscal year, albeit with some differences by product category.
   As a result of the above, during the period under review, the Group recorded net sales of ¥22,083 million (down 3.4% year on year). In terms of profit, the Group recorded operating profit of ¥1,564 million (down 22.5% year on year), ordinary profit of ¥1,122 million (down 39.8% year on year) and profit attributable to owners of parent of ¥980 million (down 30.4% year on year).
   Sales performance (year-on-year change) by mainstay category is as shown below:
   (Keyboards) Net sales: ¥5,461 million (down 2.4% year on year)
   Sales of electronic pianos were affected by rising prices and dealer inventory adjustments, in addition to a slowdown in exceptionally high demand triggered by COVID-19.
   (Percussion and Wind Instruments) Net sales: ¥6,612 million (down 1.8% year on year)
   Sales of drums were affected by dealer inventory adjustments and a reactionary decline after the shipments of backlogged orders made in the same period of the previous fiscal year. On the other hand, sales of a first-of-its-kind convertible drum set launched in the previous fiscal year remained strong.
   Sales of electronic wind instruments continued to face competition from new entrants, while being affected by dealer inventory adjustments.
   (Guitar-relatedProducts) Net sales: ¥5,533 million (down 2.0% year on year)
   As to guitar effects, demand for compact effects remained firm. However, strong demand stemming from the band boom created by a popular animation show calmed down in Japan, while being affected by dealer inventory adjustments.
   Sales of musical instruments amplifiers faced a reactionary decline after the shipments of backlogged orders made in the same period of the previous fiscal year, although new products launched in the current fiscal year contributed to sales.
   (Creation-relatedProducts & Services) Net sales: ¥3,006 million (down 4.0% year on year)
   Sales of synthesizers were severely affected by a reactionary decline after the shipments of backlogged orders made in the same period of the previous fiscal year.
   As to dance and DJ-related products, existing products showed signs of slowing down, although new product lines launched in the current fiscal year contributed to sales.
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In the software and service domain, Roland Cloud continued to provide contents and services to increase the LTV (Lifetime Value) of users, resulting in stable growth in membership.

(Video and Professional Audio) Net sales: ¥734 million (down 28.7% year on year)

Demand for video-related events recovered, and there was an increase in the demand for products. However, sales were severely affected by a reactionary decline after the shipments of backlogged orders made in the same period of the previous fiscal year.

1. Analysis of consolidated financial position

Total assets at the end of the period under review on a consolidated basis decreased by ¥1,138 million from the end of the previous fiscal year to ¥79,830 million. This is attributable primarily to decreases in cash and deposits of ¥623 million and trade receivables of ¥2,320 million, which was partially offset by increases in inventories of ¥1,038 million and intangible assets of ¥749 million.

Total liabilities decreased by ¥2,013 million from the end of the previous fiscal year to ¥38,840 million. This is attributable primarily to decreases in borrowings of ¥1,298 million and accrued expenses of ¥541 million included in "Other" under current liabilities.

Net assets increased by ¥874 million from the end of the previous fiscal year to ¥40,989 million. This is attributable primarily to the recording of profit attributable to owners of parent of ¥980 million and an increase in foreign currency translation adjustment of ¥2,069 million due to the depreciation of the yen against major currencies, which was partially offset by the decrease in retained earnings of ¥2,356 million due to a declaration and payments of dividends.

As a result of the above, the equity ratio rose by 1.8 percentage points from the end of the previous fiscal year to 51.0%.

1. Cash flows for the three months ended March 31, 2024

During the period under review, cash and cash equivalents ("net cash") decreased by ¥623 million (a decrease by ¥543 million for the same period of the previous fiscal year) to ¥12,259 million at the end of the period.

(Cash flows from operating activities)

Net cash provided by operating activities amounted to ¥3,229 million (¥5,286 million provided for the same period of the previous fiscal year), which is attributable primarily to the recording of profit before income taxes and a decrease in working capital.

(Cash flows from investing activities)

Net cash used in investing activities amounted to ¥16 million (¥632 million used for the same period of the previous fiscal year). This is mainly attributable to the capital outlay for the purchases of intangible assets, most of which is offset by proceeds from sale of businesses.

(Cash flows from financing activities)

Net cash used in financing activities amounted to ¥3,603 million (¥5,125 million used for the same period of the previous fiscal year), which is attributable primarily to repayments of borrowings and payments of dividends.

1. Management policy, management strategies, and issues to address
   During the period under review, there were no significant changes in the Group's management policy, management strategies and issues to address.
2. Research and development activities
   R&D expenses for the period under review totaled ¥1,263 million.
   During the period under review, there were no significant changes in the Group's research and development activities.

3. Material Contracts, etc.

During the period under review, no material contract was concluded or executed.

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Item 3. Information about Reporting Company

1. Company's Shares, etc.

1. Total number of shares
2. 1. Authorized shares

Class

Total number of shares authorized to be issued (shares)

Common stock

80,000,000

Total

80,000,000

1. Issued shares

	Number of issued	Number of issued	Name of financial instruments exchange
	shares as of	shares as of
	on which securities are listed or authorized
Class	current quarter end	filing date	Description
financial instruments business association
	(March 31, 2024)	(May 10, 2024)
	to which securities are registered
	(shares)	(shares)
			Tokyo Stock Exchange	The number of shares
Common stock	28,163,038	28,163,038	constituting one unit is
Prime Market
			100 shares.
Total	28,163,038	28,163,038	-	-

1. Share acquisition rights
2. 1. Stock option plans
      Not applicable.
   2. Share acquisition rights for other uses Not applicable.
3. Exercises of moving strike convertible bonds Not applicable.
4. Changes in number of issued shares, share capital and legal capital surplus

(Millions of yen, unless otherwise stated)

	Increase (decrease)	Balance of total			Increase (decrease)	Balance of
	in total number of	number of issued	Increase (decrease)	Balance of
Date	in legal capital	legal capital
issued shares	shares	in share capital	share capital
	surplus	surplus
	(shares)	(shares)
January 1, 2024 through	-	28,163,038	-	9,641	-	5,226
March 31, 2024

1. Major shareholders
   There is nothing to be stated as this quarter is the first quarterly accounting period.

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1. Voting rights
   The status of voting rights as of the end of the period under review is presented by disclosing the status as of December 31, 2023, the most recent record date, because the number of beneficiary shareholders as of March 31, 2024 could not be ascertained.
2. 1. Issued shares

			As of December 31, 2023
Category	Number of shares	Number of voting rights	Description
(shares)	(units)
Shares with no voting rights	-	-	-
Shares with restricted voting rights	-	-	-
(treasury shares)
Shares with restricted voting rights	-	-	-
(other)
Shares with full voting rights	(Treasury shares)
Common stock	-	-
(treasury shares)
441,500
Shares with full voting rights (other)	Common stock	277,098	The number of shares constituting one
27,709,800	unit is 100 shares.
Share less than one unit	Common stock	-	-
11,738
Total number of issued shares	28,163,038	-	-
Voting rights held by all shareholders	-	277,098	-

Notes: 1. "Shares with full voting rights (other)" of common stock includes 281,300 shares of the Company (2,813 voting rights) held by Custody Bank of Japan, Ltd. (Trust Account) as trust assets of the Board Benefit Trust, Employee Stock Ownership Plan Trust and Employee Shareholding Association-type ESOP Trust.

1. "Share less than one unit" of common stock includes 28 shares of the Company held by Custody Bank of Japan, Ltd. (Trust Account) as trust assets of the Board Benefit Trust, Employee Stock Ownership Plan Trust and Employee Shareholding Association-type ESOP Trust.
2. "Share less than one unit" of common stock includes 58 treasury shares held by the Company.

1. Treasury shares

				As of December 31, 2023
		Number of	Number of	Total number of
		shares held in	shares held in	Shareholding
Name of shareholder	Address of shareholder	shares held
own name	others' names	ratio (%)
		(shares)
		(shares)	(shares)
(Treasury shares)	2036-1 Nakagawa, Hosoe-cho,
Kita-ku,Hamamatsu-shi,	441,500	-	441,500	1.57
Roland Corporation
Shizuoka
Total	-	441,500	-	441,500	1.57

Notes: 1. In addition to the details stated above, the Company holds treasury shares less than one unit of 58 shares.

2. The Company has contributed 281,328 shares to Custody Bank of Japan, Ltd. (Trust Account) as trust assets of the Board Benefit Trust, the Employee Stock Ownership Plan Trust and Employee Shareholding Association-type ESOP Trust.

2. Directors and Other Officers

Not applicable.

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Item 4. Financial Information

1. Basis for Preparation of Quarterly Consolidated Financial Statements

The quarterly consolidated financial statements of the Company are prepared in accordance with the Ministry of Finance Ordinance No. 64, 2007 "Regulations on the Terminology, Forms and Preparation Methods of Quarterly Consolidated Financial Statements" ("Regulations on Quarterly Consolidated Financial Statements").

In addition, the quarterly consolidated statements of cash flows are prepared pursuant to Article 5-2, Paragraph 2 of the Regulations on Quarterly Consolidated Financial Statements.

2. Quarterly Review Report

The Company's quarterly consolidated financial statements for the current quarter (from January 1, 2024 to March 31, 2024) and for the three months ended March 31, 2024 (from January 1, 2024 to March 31, 2024) were reviewed by Grant Thornton Taiyo LLC, pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act.

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1. Quarterly Consolidated Financial Statements

1. Quarterly Consolidated Balance Sheets

			(Millions of yen)
		Previous fiscal year	Current quarter
		(As of December 31, 2023)	(As of March 31, 2024)
Assets
Current assets:
Cash and deposits	12,883	12,259
Notes and accounts receivable - trade	13,805	11,484
Merchandise and finished goods	18,094	19,074
Work in process	1,443	1,815
Raw materials and supplies	10,606	10,292
Other	2,311	2,100
Allowance for doubtful accounts	(485)	(451)
Total current assets	58,659	56,576
Non-current assets:
Property, plant and equipment:
Buildings and structures, net	3,934	3,904
Land	2,328	2,332
Other, net	3,699	3,628
Total property, plant and equipment	9,961	9,864
Intangible assets:
Goodwill	3,129	3,244
Other	3,110	3,745
Total intangible assets	6,240	6,990
Investments and other assets:
Investment securities	1,107	1,375
Other	5,106	5,131
Allowance for doubtful accounts	(105)	(107)
Total investments and other assets	6,107	6,399
Total non-current assets	22,309	23,253
Total assets	80,969	79,830

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