Sohgo Security Services : Consolidated Financial Results for the Third Quarter Ended December 31, 2021

Consolidated Financial Results for the Third Quarter Ended December 31, 2021

Prepared in Conformity with Accounting Principles Generally Accepted in Japan (Japanese GAAP)

English Translation of the Original Japanese-Language Report

SOHGO SECURITY SERVICES CO., LTD.	(Code No.2331, TSE 1st Sec.)
URL https://www.alsok.co.jp/en/ir/index.html
Representative:	Yukiyasu Aoyama, President and Representative Director
Financial and accounting:	Koji Kishimoto, Director and Senior Executive Officer	(Phone: [phone])

1. Summary of the consolidated financial results for the third quarter ended December 31, 2021 (April 1, 2021 - December 31, 2021)

(1) Consolidated operating results				(Figures rounded down to the nearest million)
	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Nine months ended
December 31, 2021	363,783		6.2	34,682	38.0	36,166	37.8	23,136	45.3
December 31, 2020	342,408		1.0	25,130	(1.5)	26,243	(2.8)	15,917	(4.0)

Note 1: Percentage shown in net sales, operating income, ordinary income, and profit attributable to owners of parent above represent the changes from the previous fiscal year.

Note 2:

Comprehensive income Nine months ended December 31, 2021

¥ 24,451 million

24.1%

Nine months ended December 31, 2020

¥ 19,710 million

3.2%

Net income per share

Diluted net income per share

Nine months ended

Yen

Yen

December 31, 2021

228.54

-

December 31, 2020

157.23

-

(2) Consolidated financial conditions

Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

Nine months ended

496,908

320,071

59.0

2,895.63

December 31, 2021

Fiscal year ended

481,465

304,427

57.6

2,741.27

March 31, 2021

Reference:

Equity capital

Nine months ended December 31, 2021

¥ 293,138 million

Year ended March 31, 2021

¥ 277,512 million

2. Dividend

Dividends per share

End of 1Q

End of 2Q

End of 3Q

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

March 31, 2021

-

35.00

-

37.00

72.00

March 31, 2022

-

38.00

-

Fiscal year ending

-

38.00

76.00

March 31, 2022(Forecast)

Note: Revisions to the dividend forecast in this quarter: No

3. Forecasts for the consolidated financial results for the fiscal year ending March 31, 2022 (April 1, 2021 - March 31, 2022) (Figures rounded down to the nearest million)

		Net sales		Operating income	Ordinary income	Profit attributable to	Net income per share
			owners of parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Yen
Annual		500,500	6.5	42,100	13.2	43,500	10.9	27,500		9.9	271.65
Note :	Revisions to the forecast of financial results in this quarter: No

4. Others

1. Changes in consolidated subsidiaries (Changes in scope of consolidation) : No

Added:

-

Removed:

-

1. Application of accounting which is simplified or exceptional for quarterly consolidated financial statements: Yes
2. Changes in accounting policies, changes in accounting estimates, and restatement

a Changes arising from revision of accounting standards	: Yes
b Changes arising from other factors	: No
c Changes arising from accounting estimate	: No
d Restatement	: No

(4) Number of shares outstanding (Ordinary shares)

a Number of shares issued	Nine months ended	102,040,042 shares	Year ended	102,040,042 shares
(including treasury stock)	December 31, 2021		March 31, 2021
b Number of shares of treasury stock	Nine months ended	805,054 shares	Year ended	805,021 shares
	December 31, 2021	March 31, 2021
c Average number of ordinary shares	Nine months ended	101,234,997 shares	Nine months ended	101,235,050 shares
throughout the fiscal year	December 31, 2021	December 31, 2020

• This summary of financial results is exempt from quarterly review procedures.
• Explanation for Appropriate Use of Forecasts and Other Notes

The forward-looking statements such as operational forecasts contained in this summary of financial results are based on the information currently available to the Company and certain assumptions which are regarded as legitimate, and the Company does not promise the achievement of these results. Actual results may differ significantly from these forecasts due to various factors.

Consolidated Balance Sheets				(Millions of yen)
				As of March 31, 2021	As of December 31, 2021
	Assets
	Current assets
	Cash and deposits	60,833	58,011
	Cash for Transportation Security Services	82,819	92,628
	Notes receivable - trade	54,283	-
	Notes and accounts receivable - trade,	and	55,613
	contract assets	-
	Securities	598	575
	Raw materials and supplies	7,551	8,167
	Costs on uncompleted construction contracts	348	642
	Advances paid	5,670	8,581
	Other	15,691	21,364
	Allowance for doubtful accounts	(180)	(207)
	Total current assets
	227,617	245,376
	Noncurrent assets
	Property, plant and equipment	103,383	100,891
	Intangible assets
	Goodwill	29,678	27,687
	Other	13,569	13,659
	Total intangible assets
	43,247	41,346
	Investments and other assets
	Investment securities	55,639	54,916
	Other	52,025	54,878
	Allowance for doubtful accounts	(447)	(502)
	Total investments and other assets
	107,217	109,293
	Total noncurrent assets
	253,847	251,531
	Total assets
	481,465	496,908
Liabilities
	Current liabilities
	Notes and accounts payable-trade	24,084	18,359
	Short-term loans payable	23,880	26,748
	Income taxes payable	6,585	5,674
	Provision	2,516	1,138
	Other	46,726	54,364
	Total current liabilities
	103,793	106,285
	Noncurrent liabilities
	Long-term loans payable	4,528	2,858
	Retirement benefit liability	26,974	27,304
	Provisions	1,730	1,564
	Asset retirement obligations	480	486
	Other	39,529	38,336
	Total noncurrent liabilities
	73,243	70,551
	Total liabilities
	177,037	176,837

Consolidated Balance Sheets		(Millions of yen)
			As of March 31, 2021	As of December 31, 2021
	Net assets
	Shareholders' equity
	Capital stock	18,675	18,675
	Capital surplus	34,026	34,129
	Retained earnings	220,464	235,890
	Treasury stock	(1,071)	(1,072)
	Total shareholders' equity
	272,094	287,623
	Accumulated other comprehensive income
	Valuation difference on	7,026	6,756
	available-for-sale securities
	Revaluation reserve for land	(3,494)	(3,378)
	Foreign currency translation adjustment	(29)	85
	Remeasurements of defined benefit plans	1,915	2,053
	Total accumulated other comprehensive income
	5,417	5,515
	Minority interests
	26,915	26,932
	Total net assets
	304,427	320,071
	Total liabilities and net assets
	481,465	496,908

Consolidated Statements of Income		(Millions of yen)
		Nine months ended	Nine months ended
		December 31, 2020	December 31, 2021
	Net sales	342,408	363,783
	Cost of sales	257,157	269,475
	Gross profit
	85,250	94,307
	Selling, general and administrative expenses
	60,120	59,625
	Operating income
	25,130	34,682
	Non-operating income
	Interest income	129	138
	Dividends income	625	641
	Gain on sales of investment securities	2	121
	Share of profit of entities accounted for using equity	764	959
	method
	Dividend income of insurance	221	240
	Penalty income	611	612
	Other	1,050	934
	Total non-operating income
	3,405	3,648
	Non-operating expenses
	Interest expenses	1,512	1,434
	Financing expenses	201	199
	Loss on sale of investment securities	-	5
	Other	578	525
	Total non-operating expenses
	2,292	2,164
	Ordinary income
	26,243	36,166
	Extraordinary income
	Gain on investment securities	24	7
	Gain on sales of non-current assets	99	224
	Compensation income	50	1,067
	Total extraordinary income
	174	1,300
	Extraordinary loss
	Loss on valuation of investment securities	73	64
	Loss on sale of investment securities	0	0
	Impairment Losses	43	295
	Total extraordinary losses
	117	360
	Income before income taxes
	26,300	37,106
	Income taxes
	9,158	12,642
	Net Income
	17,142	24,463
	Profit attributable to non-controlling interests
	1,224	1,327
	Profit attributable to owners of parent
	15,917	23,136