Member of the Financial Accounting Standards Foundation

Disclaimer: This is a Japanese-English translation of the summary of financial statements of the Company produced for your convenience. Since no auditor audited this report, officially only the Japanese version is assumed to be the summary of financial statements of the Company. This summary does not constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on these statements. Should there be any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct.

October 12, 2021

Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending May 31, 2022

Listed company:

INTER ACTION Corporation

Listed stock exchange: Tokyo

Securities code:

7725

URL:

http://www.inter-action.co.jp

Representative:

Nobuo Kiji, CEO & President

Contact:

Kaori Kawaguchi, Chief, Business Planning Team

Telephone number:

+81-45-263-9220

Submission of quarterly report: October 13, 2021

Dividend payment commencement date: -

Preparation of explanatory materials for quarterly financial results: None

Holding of a briefing on quarterly financial results: None

(Amounts of less than one million yen are truncated)

1. Consolidated Financial Results for the Cumulative First Quarter of the Fiscal Year Ending May 31, 2022 (June 1, 2021 to August 31, 2021)

(1) Consolidated operating results (Cumulative)

(% figures show year-on-year change)

Net sales

Operating income

Ordinary income

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Three months ended

1,720

31.7

429

118.7

434

122.1

286

97.7

August 31, 2021

Three months ended

1,306

(28.2)

196

(57.9)

195

(57.5)

145

(50.3)

August 31, 2020

(Note) Comprehensive income: Three months ended August 31, 2021: ¥281 million / 97.2%

Three months ended August 31, 2020: ¥142 million / -47.8%

Profit per share

Profit per share-diluted

Yen

Yen

Three months ended August 31, 2021

26.17

―

Three months ended August 31, 2020

13.28

―

(2) Consolidated financial position

Total assets

Net assets

Shareholders' equity ratio

Millions of yen

Millions of yen

%

As of August 31, 2021

11,183

8,959

80.1

As of May 31, 2021

11,564

9,038

78.2

(Reference) Shareholders' equity: As of August 31, 2021: ¥8,959 million As of May 31, 2021: ¥9,038 million

2. Dividends

Annual dividends

First quarter-end

Second quarter-end

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended May 31, 2021

−

0.00

−

20.00

20.00

Fiscal year ending May 31, 2022

−

Fiscal year ending May 31, 2022

0.00

−

20.00

20.00

(Forecast)

(Note) Amendment to forecasts of dividends recently announced: None

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending May 31, 2022 (June 1, 2021 to May 31, 2022)

(% figures show year-on-year change for the full year and quarter)

Net sales

Operating income

Ordinary income

Profit attributable to

Profit per share

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

6,803

2.6

1,871

6.8

1,806

3.3

1,189

2.6

108.64

(Note) 1. Amendment to forecasts of dividends recently announced: None

2. The Company has implemented an ESOP and Directors' stock compensation plan both in the form of stock benefit trusts. Accordingly, profit per share is calculated based on the average number of shares during the fiscal year, excluding the number of treasury shares, which includes Inter Action stock held by the stock benefit ESOP trust accounts and Directors' compensation stock benefit trust accounts.

  • Notes
  1. Change in significant subsidiaries during three months ended August 31, 2021 (changes in specified subsidiaries affecting the scope of consolidation): None

New: -

(Company name:

) Excluded: -

(Company name:

)

  1. Application of special accounting for preparing quarterly consolidated financial statements: None
  2. Changes in accounting policies and estimates, and retrospective restatements
    1. Changes in accounting policies in accordance with revision of accounting standards: Yes
    2. Changes in accounting policies other than item (i) above: None
    3. Changes in accounting estimates: None
    4. Retrospective restatements: None

(Note) For details, refer to "(3) Note regarding the quarterly consolidated financial statements (Changes in accounting policies)" under "2. Quarterly Consolidated Financial Statements and Notes" (page 9) of the Attached Materials.

  1. Number of shares issued (common stock)
    1. Number of shares outstanding at end of period (including treasury shares)

As of August 31, 2021

11,510,200 shares

As of May 31, 2021

11,510,200 shares

(ii) Number of treasury shares at end of period

As of August 31, 2021

572,738 shares

As of May 31, 2021

514,513 shares

(iii) Average number of shares during period

For the three months ended August 31, 2021

10,966,899 shares

For the three months ended August 31, 2020

10,932,417 shares

(Note) The Company has implemented an ESOP and Directors' stock compensation plan both in the form of stock benefit trusts. Accordingly, treasury shares, as stated, include Inter Action stock held by the stock benefit ESOP trust accounts and Directors' compensation stock benefit trust accounts.

  • Quarterly financial results are not subject to auditing by a certified public accountant or an audit firm.
  • Proper use of earnings forecasts, and other special matters
    The above forecasts of consolidated financial results are based on certain assumptions on economic situation, market trends, etc. deemed to be reasonable when the forecasts were made. Consequently, actual results may differ from the forecasts due to a variety of future factors. For details of the above forecasts, refer to"(3) Explanation of forward-looking information including consolidated earnings forecasts" under "1. Qualitative Information on Quarterly Results" (page 4) of the Attached Materials.

[Attached Materials]

Index

1. Qualitative Information on Quarterly Results…………………………………………………………………………………

2

(1) Explanation of operating results …………………………………………………………………………………………

2

(2) Explanation of financial position …………………………………………………………………………………………

4

(3) Explanation of forward-looking information including consolidated earnings forecasts ………………………………

4

2. Quarterly Consolidated Financial Statements and Notes……………………………………………………………………

5

(1) Quarterly consolidated balance sheets ……………………………………………………………………………………

5

(2) Quarterly consolidated statements of income and consolidated statements of comprehensive income…………………

7

(Quarterly consolidated statements of income)

June 1, 2021 - August 31, 2021 ………………………………………………………………………………………

7

(Quarterly consolidated statements of comprehensive income)

June 1, 2021 - August 31, 2021 ………………………………………………………………………………………

8

(3) Note regarding the quarterly consolidated financial statements …………………………………………………………

9

(Notes on premise of going concern) ……………………………………………………………………………………

9

(Notes on significant changes in the amount of shareholders' equity) …………………………………………………

9

(Changes in accounting policies) ………………………………………………………………………………………

9

(Additional information) ………………………………………………………………………………………………

9

(Segment information) …………………………………………………………………………………………………

11

(Revenue recognition-related information) ……………………………………………………………………………

12

3. Supplementary explanation of consolidated financial results for the first quarter of the fiscal year ending May 31, 2022…

13

(1) Status of orders ……………………………………………………………………………………………………………

13

- 1 -

1. Qualitative Information on Quarterly Results

  1. Explanation of consolidated operating results
    The Inter Action Group conducts business in three segments: Internet of things related works; environmental energy related works; and promotion business of Industry 4.0. The business environment in each segment is as described below.
    In the Internet of things related works segment, we manufacture inspection illuminators and pupil lens modules used for quality inspections in the image sensor production process and sell them to image sensor manufacturers.
    Currently, in the image sensor market, there are a dozen or so manufacturers of image sensors, of which two companies, one Japanese and one Korean, account for about 60% of the market share. Aside from these existing makers, there have recently been moves by Chinese manufacturers to enter the business, which leads us to believe that the image sensor market will continue to expand.
    The market for image sensors tends to hinge on the smartphone market since smartphones account for about 60- 70% of image sensor applications. Smartphone shipment volume has been on the rise compared with the previous fiscal year, owing to such factors as stay-at-home demand amid the COVID-19 pandemic and the spread of 5G compatible devices. However, a shortage of semiconductors and other parts could constrain smartphone production volume going forward.
    The increasing number of image sensors (cameras) installed per smartphone and the growing popularity of smartphones equipped with multiple image sensors (cameras) in recent years means that image sensor manufacturers will probably need to continue increasing production capacity.
    In the short-term, demand remains focused on conventional image sensors that capture visible light in order to take photos and videos.
    In the medium to long term, we anticipate demand to be driven by image sensors for use in ToF (time-of-flight) sensors and LiDAR (light detection and ranging) sensors, which aim to capture three-dimensional information, such as the distance between objects. Use of these sensors in smartphones is gaining momentum and an increase in demand can be expected with the development of various applications.
    Over the long term, demand is expected to increase for image sensors that can capture three-dimensional information needed for self-driving vehicles and for industrial applications (machine-vision, surveillance cameras, etc.).
    In the environmental energy related works segment, we manufacture and sell drying deodorizers used together with rotary presses (commercial printing presses) for large-volume printing and exhaust gas treatment systems for factories.
    In the printing machinery industry, although new capital investment is diminishing due to the growing prevalence of information technologies, a certain number of rotary presses are replaced every year due to age-related degradation, and there is also demand for periodic maintenance. As there is minimal competition, the Inter Action Group is able to stably accommodate this demand at present. Due to the COVID-19 pandemic, customers' appetite for capital investment in new and large-scale projects remains subdued, but companies are gradually stepping up equipment replacements looking ahead to a post-COVID-19 future.
    In the promotion business of Industry 4.0 segment, we mainly manufacture precision vibration isolation systems for removing vibrations that are a hindrance in the production process for displays and sell the systems to display manufacturers. We also manufacture testing systems for investigating whether gears are of the shape designed and sell them to gear manufacturers. In addition, as a new business for the Group, we are actively working to commercialize FA (factory automation) image processing and laser processing equipment-related businesses.
    In the current flat panel and OLED display industries, appetite for investment has been sluggish among overseas customers in particular due to the impact of the COVID-19 pandemic, and the outlook remains uncertain.
    Moreover, the gear testing systems market has essentially conformed to conditions of the machine tools market and is susceptible to economic fluctuations. Market conditions temporarily fell to an extent exceeding the global financial crisis due to the COVID-19 pandemic, but there have been signs of a gradual recovery centered on domestic auto manufacturers and in overseas (emerging country) industries.
    In our new business related to FA image processing, we have developed and commercialized a gear inspection device that can automatically detect defective products based on images taken of small scratches that occur during the manufacturing process of metal gears. We began selling it through our subsidiary Tokyo Technical Instruments
    • 2 -

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Inter Action Corporation published this content on 21 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2021 08:03:09 UTC.