SK Electronics : Summary Report of Consolidated Financial Statements for the First Quarter of the Fiscal 2021

First Quarter, FYE September 2021 Financial Report [Japan GAAP] (Consolidated)

February 8, 2021

Company Name	SK-Electronics Co., Ltd.	Stock Exchange Listing: Tokyo Stock Exchange
Code No.	6677	URLhttp://www.sk-el.co.jp
Representative	(Title) President
Contact	(Title) Director

Masanori Ishida

Yasuhisa Mukaida (TEL) 075 (441) 2333

First Quarter Earnings Report February 8, 2021 Scheduled Date for Commencement of Dividend Payments － Preparation of Summary Supplementary Explanatory Materials: Yes

Quarterly Earnings Presentations: No

(Rounded down to the nearest ¥ million)

1. Consolidated Results of Operations for the First Quarter FYE 9/2021 (October 1, 2020 through December 31, 2020)

(1) Consolidated Results of Operations (cumulative) (% indicates increase/decrease vs. same period of the prior year)

Net Sales

EBITDAOperating Income Ordinary IncomeNet income attributable to owners of the parent

¥ millions

%

1Q FYE 9/2021 1Q FYE 9/2020

4,502 5,247

-14.2 -21.3

1,061 1,345

-21.1 -35.8

¥ millions 322 199

% 61.7 -85.7

¥ millions

332

% 232.9 -93.4

¥ millions

223

51

% 335.3 -95.1

(Note) Comprehensive Income

1Q FYE 9/2021 344 million yen (-26.5%)

1Q FYE 9/2020

469 million yen (-36.3%)

Net Income per Share	Diluted Net Income per Share
1Q FYE 9/2021 1Q FYE 9/2020	Yen 21.33 4.90	Yen － －

(Note) EBITDA = Operating Income + Depreciation

(2) Consolidated Financial Position

Total Assets	Net Assets	Equity Ratio	Net Assets per Share
1Q FYE 9/2021 FYE 9/2020	¥ millions 31,966 31,778	¥ millions 22,624 22,385	% 70.8 70.4	Yen 2,157.02 2,134.25

(Reference) Owned Capital

1Q FYE 9/2021

22,624 million yenFYE 9/2020

22,385

million yen

2. Dividends

Dividend per Share
First Quarter	Second Quarter	Third Quarter	Fiscal Year End	Total
FYE 9/2020 FYE 9/2021	Yen － －	Yen 0.00	Yen －	Yen 10.00	Yen 10.00
FYE 9/2021 (Projected)	0.00	－	20.00	20.00

(Note) Revisions to most recently announced dividend forecast: No

3. Projected Consolidated Results of Operations for FYE 9/2021 (October 1, 2020 through September 30, 2021)

(% indicates increase/decrease compared to prior year or prior year interim period)

Net Sales	EBITDA	Operating Income	Ordinary Income	Net income attributable to owners of the parent	Net Income per Share
Interim Full Year	¥ millions 10,000 21,500	% -5.4 12.5	2,160 4,740	-19.8 13.3	¥ millions 700 1,500	% 101.5 -	¥ millions 650 1,500	% 100.4 -	¥ millions 450 1,110	% 123.7 -	Yen 42.90 104.88

Revisions to most recently announced earnings projection: Yes

(Note)

*Notes
(1) Changes in significant subsidiaries during the period	: None
(2) Adoption of special accounting treatment for the preparation of quarterly consolidated earnings statements	: None
(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
<1> Changes in accounting policies in conjunction with revisions of accounting standards etc.	: None
<2> Changes in accounting policies other than those in <1>	: Yes
<3> Changes in accounting estimates	: None
<4> Retrospective restatements	: None
(4) Number of shares issued and outstanding (common stock)
<1> Number of shares issued and outstanding at end
of period (including treasury stock)
<2> Number of shares of treasury stock at end of
period
<3> Average number of shares during the
period(Quarterly cumulative)

1Q FYE 9/2021	11,368,400 shares	FYE 9/2020	11,368,400 shares
1Q FYE 9/2021	879,782 shares	FYE 9/2020	879,782 shares
1Q FYE 9/2021	10,488,618 shares	1Q FYE 9/2020	10,484,573 shares

(Note) The number of treasury shares deducted when calculating the number of shares of treasury stock at end of FYE 9/2020 includes shares held in trust for the director stock-based compensation system.

(Reference) Projected Non-Consolidated Results of Operations for FYE 9/2021 (October 1, 2020 through September 30, 2021)

(% indicates increase/decrease compared to prior year or prior year interim period)

Net Sales	EBITDA	Operating Income	Ordinary Income	Net income attributable to owners of the parent	Net Income per Share
Interim Full Year	¥ millions 7,300 16,400	% -3.2 19.4	1,110 2,720	4.0 97.2	¥ millions 350 900	% - -	¥ millions 550 1,100	% 593.3 -	¥ millions 450 800	% 870.3 -	Yen 42.90 76.27

(Note) Revisions to most recently announced earnings projection: Yes

*This quarterly earnings report is exempt from quarterly review procedures by either a certified public accountant or an audit firms.

*Explanation concerning appropriate use of the projected operating results and other special remarks

The forward-looking statements, including the operating income forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual business results may differ substantially due to a number of factors. Please see Page 4 "1. Qualitative Information on Consolidated Operating Results for the First Quarter of FYE September 2021, (3) Qualitative Explanation on Consolidated Earnings Projections" concerning the assumptions used as the basis for the projected operating income and matters to note before using the projected operating income.

○Attachments Table of Contents

1. Qualitative Information on Consolidated Operating Results for the First Quarter of FYE September 2021 ..................................... 4

(1) Qualitative Explanation on Consolidated Results of Operations ................................................................................................ 4

(2) Qualitative Explanation on Consolidated Financial Position ...................................................................................................... 4

(3) Qualitative Explanation on Consolidated Earnings Projections .................................................................................................. 4

2. Quarterly Consolidated Financial Statements & Notes ...................................................................................................................... 5

(1) Quarterly Consolidated Balance Sheets ...................................................................................................................................... 5

(2) Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ..................................... 7

(3) Notes to the Quarterly Consolidated Financial Statements ......................................................................................................... 9

(Notes relating to the assumptions of going concerns) ............................................................................................................... 9

(Notes in the event of Significant Changes in Shareholders' Equity) ......................................................................................... 9

(Changes in accounting policies that are difficult to distinguish from changes in accounting) ................................................... 9

(Additional Information) ............................................................................................................................................................ 9

1. Qualitative Information on Consolidated Operating Results for the First Quarter of FYE September 2021

(1) Qualitative Explanation on Consolidated Results of Operations

In the first quarter of consolidated FYE September 2021, although some economic activities showed signs of an uptick reflecting various government policies to address the novel coronavirus (COVID-19), the outlook is still murky for the economies in Japan and abroad, due to concerns that the US-China trade dispute will drag on and the risk of impact from another wave of COVID-19.

In the flat panel display industry, the launch of new production lines, which had been postponed, resumed owing to an ease -up on travel restrictions to China. In addition, panel manufacturers continued to implement mass production reflecting an ongoing rise in LCD panel prices owing to an increase in TV and notebook PC demand as consumers spend more time at home. Meanwhile, in the photomask market, the demand for development masks did not increase as expected due to delays in new panel development and a review of plans.

Amid this backdrop, SK-Electronics Group secured profit as net sales rose in contrast with the fourth quarter of FYE September 2020, depreciation expense decreased, product mix improved and reduction of costs.

Accordingly, the SK-Electronics Group posted consolidated net sales of ¥4,502 million, a decrease of 14.2% year-on-year, EBITDA of ¥1,061 million, a decrease of 21.1%, operating income of ¥322 million, an increase of 61.7%, and ordinary income of ¥332 million, an increase of 232.9%. Meanwhile, net income attributable to owners of the parent totaled ¥223 million, an increase of 335.3% year-on-year.

(2) Qualitative Explanation on Consolidated Financial Position

At the end of the first quarter of consolidated FYE September 2021, total assets came to ¥31,966 million, an increase of ¥187million versus the end of the prior consolidated fiscal year. This mainly reflects declines in cash and deposits, and other current assets, but increases in notes and accounts receivable - trade, and construction in progress.

Total liabilities stood at ¥9,341 million, a decrease of ¥51 million versus the end of the prior consolidated fiscal year. This primarily reflects an increase in notes and accounts payable - trade, but a decrease in long-term loans payable.

Total net assets were ¥22,624 million, an increase of ¥238 million versus the end of the prior consolidated fiscal year. This mainly reflects an increase in retained earnings.

(3) Qualitative Explanation on Consolidated Earnings Projections

We revised our earnings projection for the first half of consolidated FYE September 2021, which was released on November 9, 2020, due to the prolonged impact of COVID-19. That said, we did not revise our earnings projection for the full year.