STAR MICRONICS CO., LTD. August 9, 2023
Fiscal 2023 Second-quarter Consolidated Earnings Report（Japanese GAAP）
These financial statements have been prepared for reference in accordance with accounting principles and practices generally accepted in Japan.
Company name: Star Micronics Co., Ltd. | Stock listing: Tokyo Stock Exchange | ||||||||
Code: 7718 | URL https://www.star-m.jp | ||||||||
Representative Director: Mamoru Sato, President and CEO | |||||||||
Inquiries: Seigo Sato, Senior Executive Officer, General Manager, General Administration Headquarters | |||||||||
TEL: 054 -263-1111 | |||||||||
Scheduled release of Fiscal 2023 Second-quarter Business Report: August 10, 2023 | |||||||||
Scheduled payment of dividends: September 6, 2023 | |||||||||
Preparation of supplementary explanatory materials for quarterly earnings report: Yes | |||||||||
Quarterly earnings presentation: Yes | |||||||||
(Figures less than one million are rounded down) | |||||||||
1. Results for the Second Quarter of Fiscal 2023 (From January 1, 2023 to June 30, 2023) | |||||||||
(1) Consolidated Operating Results | （Percentages represent changes over the corresponding period of the previous fiscal year） | ||||||||
Net Income | |||||||||
Net Sales | Operating Income | Ordinary Income | Attributable to | ||||||
Owners of Parent | |||||||||
(¥ million) | % | (¥ million) | % | (¥ million) | % | (¥ million) | % | ||
FY 2023 Second Quarter | 42,926 | 9.4 | 7,380 | 29.0 | 7,614 | 27.5 | 5,238 | 24.5 | |
FY 2022 Second Quarter | 39,252 | 40.5 | 5,722 | 117.5 | 5,971 | 107.9 | 4,209 | 99.1 |
(Note) Comprehensive income FY 2023 Second Quarter ¥9,113 million［(3.0)%］ FY 2022 Second Quarter ¥9,393 million［141.2%］
Net Income | Diluted Net Income | ||
Per Share | Per Share | ||
(¥) | (¥) | ||
FY 2023 Second Quarter | 139.36 | 138.91 | |
FY 2022 Second Quarter | 109.91 | 109.34 | |
(2) Consolidated Financial Position | |||
Total Assets | Net Assets | Equity Ratio | |
(¥ million) | (¥ million) | % | |
As of June 30, 2023 | 99,638 | 79,758 | 79.7 |
As of December 31, 2022 | 99,538 | 73,088 | 73.0 |
Reference: Shareholders' Equity | |||||
As of June 30, 2023 ¥79,378 million As of December 31, 2022 | ¥72,628 million | ||||
2. Dividends | |||||
Dividends Per Share | |||||
1Q end | 2Q end | 3Q end | Year-end | Full Year | |
(¥) | (¥) | (¥) | (¥) | (¥) | |
FY 2022 | － | 30.00 | － | 40.00 | 70.00 |
FY 2023 | － | 30.00 | |||
FY 2023(projected) | － | 30.00 | 60.00 | ||
(Note) Changes to the latest dividend forecast announced: None | |||||
Breakdown of Year-End Dividends in FY2022 | Ordinary dividend ¥30.00 Special dividend ¥10.00 |
3. Consolidated Outlook for the Fiscal Year Ending December 31, 2023（From January 1, 2023 to December 31, 2023)
(Percentages represent changes over the corresponding period of the previous fiscal year) | |||||||||
Net Income | Net | ||||||||
Net Sales | Operating Income | Ordinary Income | Attributable to | Income | |||||
Owners of Parent | Per Share | ||||||||
(¥ | million) | % | (¥ million) | % | (¥ million) | % | (¥ million) | % | (¥) |
Full Year | 79,000 | (9.6) | 11,000 | (21.0) | 11,400 | (19.7) | 8,400 | (18.4) | 224.85 |
(Note) Changes to the latest consolidated results forecast announced: Yes
*Note
(1) Significant changes in subsidiaries during the | period under review (changes | in certain specified subsidiaries |
resulting in revised scope of consolidation): None | ||
New company: － (Company name) | , Excluded company: － | (Company name) |
- Adoption of special accounting treatment used in preparation of the quarterly consolidated financial statements: None
- Changes in accounting policies, estimates and restatement or corrections
- Changes associated with revised accounting standards: Yes
- Changes other than those in (i) above: None
- Changes in accounting estimates: None
- Retrospective restatement: None
*Please refer to "(3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" under "2. Quarterly Consolidated Financial Statements and Major Notes" on page 7 for details.
- Number of shares issued and outstanding (Common stock)
- Number of shares issued and outstanding at period-end (Including treasury stock)
As of June 30, 2023 | 42,465,134 shares | As of December 31, 2022 | 42,465,134 shares |
(ii) Number of treasury stock at period-end | |||
As of June 30, 2023 | 5,249,794 shares | As of December 31, 2022 | 4,809,548 shares |
(iii) Average number of outstanding shares (During the six months) | |||
As of June 30, 2023 | 37,591,661 shares | As of June 30, 2022 | 38,298,973 shares |
- This quarterly earnings report is not subject to quarterly reviews.
- Regarding the appropriate use of earnings projections and other noteworthy matters
The above projections are based on information available at the time of release of this report and certain assumptions the Company considers reasonable. The Company does not promise that these projections will be achieved. Actual results may differ materially from projections due to a variety of factors. For information regarding the assumptions and other matters related to earnings projections in this report, refer to "(3) Explanation of the Consolidated Earnings Projections and Other Forecasts" under "1. Qualitative Information regarding Quarterly Consolidated Business Performance" on page 2.
○ (Attached Documents) Index | ||
1. Qualitative Information regarding Quarterly Consolidated Business Performance | 2 | |
(1) | Explanation of Consolidated Operating Results | 2 |
(2) | Explanation of Financial Position | 2 |
(3) | Explanation of the Consolidated Earnings Projections and Other Forecasts | 2 |
2. Quarterly Consolidated Financial Statements and Major Notes | 3 | |
(1) | Quarterly Consolidated Balance Sheet | 3 |
(2) | Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income | 5 |
(3) | Notes to Quarterly Consolidated Financial Statements | 7 |
(Note on Going Concern Assumption) | 7 | |
(Note on Significant Changes in Shareholders' Equity Accounts) | 7 | |
(Changes in Accounting Policies) | 7 |
1
1. Qualitative Information regarding Quarterly Consolidated Business Performance
(1) Explanation of Consolidated Operating Results
During the first half of the fiscal year ending December 31, 2023, conditions surrounding the global economy remained shrouded in uncertainty. Despite an overall modest economic recovery amid signs of a lull in the surge in resource prices and prolonged inflation, this uncertainty largely reflects growing concerns of a slowdown in the economy due to interest rate hikes by the central banks in the U.S. and Europe, a downturn in the pace of consumption and investment in China, and fluctuations in foreign currency exchange rates.
In each of the major markets in which the Star Micronics Group operates, demand for POS printers was generally weak mainly in the U.S. and European markets. In addition, demand for the Group's mainstay machine tools in overseas markets, which had previously remained high, stalled with little or no forward momentum. Exacerbating these difficult trends, demand in Japan also failed to recover.
Under these circumstances, the Star Micronics Group reported sales of ¥42,926 million for the second quarter of the fiscal year under review, up 9.4% compared with the corresponding period of the previous fiscal year. The increase was largely due to an upswing in sales of machine tools. From a profit perspective, operating income climbed 29.0%, to ¥7,380 million due in large part to higher sales. Ordinary income increased 27.5%, to ¥7,614 million. Net income attributable to owners of parent grew 24.5%, to ¥5,238 million.
Meanwhile, Smart Solution Technology, Inc. (SST) was included in the Company's scope of consolidation and the Special Products Segment effective from the first half of the fiscal year under review.
(Special Products)
In POS printers, mPOS demand, which had previously remained robust, stalled in the period under review. Despite this sluggish demand, sales increased. In addition to the easing of delays in the supply of products that had arisen due to difficulties in procuring components and parts as well as disruptions to logistics throughout the previous fiscal year, this upswing in sales largely reflects the impact of the yen's depreciation. Looking at trends by geographic region, sales in the U.S. and European markets grew substantially. This is mainly due in part to the impact of the yen's depreciation. Despite weak market conditions throughout the domestic market, sales were on a par with the corresponding period of the previous fiscal year owing to the inclusion of SST in the Company's scope of consolidation.
Accounting for these factors, sales increased 12.8% compared with the corresponding period of the previous fiscal year, to ¥8,982 million. Operating income increased 11.7% year on year, to ¥1,701 million.
(Machine Tools)
Sales of CNC automatic lathes increased. while market conditions were sluggish across all regions from the beginning of the year, this increase in sales was largely attributable to progress in reducing the order backlog from the previous fiscal year mainly in the European and U.S. markets and the impact of the yen's depreciation. Meanwhile, sales decreased substantially in the Asian market. This was largely attributable to weak sales of automotive-related products on the back of the continued cautious approach toward capital investment in China over the latter half of the previous fiscal year. Sales declined in the domestic market, mainly due to the continued lackluster performance of the automotive sector.
Accounting for each of the aforementioned factors, sales grew 8.5% compared with the corresponding period of the previous fiscal year, to ¥33,943 million. Operating income jumped 30.0%, to ¥6,684 million.
(2) Explanation of Financial Position
Total assets as of the end of the first half of the fiscal year under review stood at ¥99,638 million, roughly in line with the balance as of the end of the previous fiscal year. Despite an increase in inventories, this was mainly due to the decline in cash and deposits as well as trade notes and accounts receivable. Total liabilities came to ¥19,879 million, a decrease of ¥6,570 million compared with the previous fiscal year-end. This largely reflected the decline in trade payables. Total net assets increased ¥6,670 million compared with the end of the previous fiscal year, to ¥79,758 million. This was in large part due to the increase in retained earnings and foreign currency translation adjustments notwithstanding such factors as the purchase of treasury stock.
(3) Explanation of the Consolidated Earnings Projections and Other Forecasts
Looking ahead, economic conditions throughout the global economy are expected to remain shrouded in uncertainty. This is primarily due to global geopolitical risks and concerns of an economic slowdown caused by inflation and financial instability.
Under these circumstances, and in light of results for the first half of the fiscal year under review, net sales for the full fiscal year ending December 31, 2023 are projected to total ¥79,000 million (down 9.6% compared with the previous fiscal year). Turning to earnings forecasts for the full fiscal year, operating income is expected to come in at ¥11,000 million (down 21.0% year on year), ordinary income ¥11,400 million (down 19.7% year on year), and net income ¥8,400 million (down 18.4% year on year).
Forecasts are based on the assumptions that the yen/US dollar exchange rate will be JPY130 and the yen/Euro exchange rate will be JPY145.
2
2. Quarterly Consolidated Financial Statements and Major Notes
- Quarterly Consolidated Balance Sheet
(Unit: Thousands of yen) | ||
As of December 31, 2022 | As of June 30, 2023 | |
Assets | ||
Current assets | ||
Cash and deposits | 30,069,164 | 28,169,932 |
Trade notes and accounts receivable | 22,749,935 | 21,663,024 |
Securities | 34,278 | － |
Merchandise and finished goods | 14,361,778 | 17,577,855 |
Work in process | 6,578,912 | 5,787,931 |
Raw materials and supplies | 4,146,484 | 4,110,688 |
Other | 2,264,776 | 1,733,688 |
Allowance for doubtful accounts | (132,608) | (166,492) |
Total current assets | 80,072,720 | 78,876,629 |
Non-current assets | ||
Property, plant and equipment | ||
Buildings and structures, net | 7,384,989 | 7,383,476 |
Machinery, equipment and vehicles, net | 3,332,228 | 3,586,395 |
Tools, furniture and fixtures, net | 1,350,231 | 1,419,556 |
Land | 2,008,241 | 2,464,997 |
Lease assets, net | 61,195 | 62,805 |
Construction in progress | 215,439 | 187,322 |
Other, net | 1,344,130 | 1,416,566 |
Total property, plant and equipment | 15,696,456 | 16,521,121 |
Intangible assets | ||
Other | 445,331 | 705,759 |
Total intangible assets | 445,331 | 705,759 |
Investments and other assets | ||
Investment securities | 1,131,830 | 1,042,465 |
Deferred tax assets | 425,428 | 459,840 |
Net defined benefit asset | 1,299,938 | 1,482,307 |
Other | 466,926 | 550,468 |
Total investments and other assets | 3,324,123 | 3,535,081 |
Total non-current assets | 19,465,910 | 20,761,962 |
Total assets | 99,538,631 | 99,638,592 |
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Disclaimer
Star Micronics Co. Ltd. published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 06:16:30 UTC.
