４℃ホールデ（8008） – Summary of Financial Results for the third quarter 2022

CONSOLIDATED FINANCIAL REPORT（Japanese GAAP） NINE-MONTH PERIOD OF THE FISCAL YEAR ENDING FEBRUARY 28, 2022 (March 1, 2021 to November 30, 2021) January 6, 2022 YONDOSHI HOLDINGS INC. is listed on the First Section of the Tokyo Stock Exchange under the securities code number 8008. Representative: Inquiries: Quarterly Securities Report filing date (planned): January 11, 2022 Supplemental materials prepared for quarterly financial results: No Holding of quarterly financial results meeting: No Dividend payment commencement date (planned): — Saishi Kimura, Chairman and Representative Director, CEO Masahiko Nishimura, Director and Executive Officer responsible for Finance Tel: +81-3-5719-3429 URL: https:// yondoshi.co.jp/ (Millions of yen rounded down) 1. Consolidated Operating Results for the Nine-Month Period of Fiscal 2021 (March 1, 2021 to November 30, 2021) (1) Consolidated Operating Results (Cumulative) (Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.) Profit attributable to owners of parent Operating Income Ordinary Income Net sales Millions of yen ％ Millions of yen ％ Millions of yen ％ Millions of yen ％ 27,323 (3.5) 695 (62.9) 1,169 (47.1) 600 (49.5) 28,323 (13.6) 1,874 (38.0) 2,210 (32.8) 1,188 (40.8) Note: Comprehensive income FY2021 Nine-Month Period: 769 million yen (－64.7%) FY2020 Nine-Month Period: 2,180 million yen (11.3%) FY2021 Nine-Month Period FY2020 Nine-Month Period FY2021 Nine-Month Period FY2020 Nine-Month Period Net Income per Share Net Income per Share after Dilution Yen 28.04 54.80 Yen — — (Reference) Operating income before the amortization of goodwill: FY 2021 Nine-Month Period: ¥1,068 million FY 2020 Nine-Month Period: ¥2,246 million The Company considers operating income before the amortization of goodwill to be an important management indicator. (2) Consolidated Financial Position Total Assets Net Assets Net Assets per Share Net Assets to Total Assets November 30, 2021 February 28, 2021 Millions of yen Millions of yen 54,203 53,000 38,572 39,543 (Reference)Shareholders’ equity: November 30, 2021: 38,549 million yen February 28, 2021: 39,513 million yen 2. Dividends (Record Date) Fiscal 2020 Fiscal 2021 Fiscal 2021 (Forecast) End of 1Q End of 2Q Year-end Annual Dividends per Share End of 3Q Yen — — Yen 40.50 41.50 Yen — — Note: Revision to the most recently announced cash dividend forecast: No % 71.1 74.6 Yen 40.50 41.50 Yen 1,798.57 1,844.69 Yen 81.00 83.00 – 1 – 3. Forecasts of Consolidated Operating Results for the Fiscal Year Ending February 28, 2022 (March 1, 2021 to February 28, 2022) Net Sales (% figures for the full fiscal year represent year-on-year increase or decrease) Net Income per Share Profit attributable to owners of parent Ordinary Income Operating Income Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen en 38,300 (2.9) 1,700 (38.6) 2,250 (29.6) 1,400 (13.7) 65.33 Fiscal year ending February 28, 2022 Note: Revision to the most recently announced operating results forecast: Yes (Reference) Forecast EPS before the amortization of goodwill for the full FY 2021 is ¥88.50. Notes (1) Changes in Important Subsidiaries during the Period: (Changes in specified subsidiaries that caused changes in the scope of consolidation): No (2) Application of Special Accounting Practices in the Preparation of the Quarterly Consolidated Financial Statements: Yes (3) Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements 1) Changes of accounting principles in line with revisions to accounting and other standards: No 2) Changes of accounting principles other than 1) above: No 3) Changes in accounting estimates: No 4) Retrospective restatement: No (4) Number of Shares Issued and Outstanding (Common Stock) 1. Total number of shares issued and outstanding (including treasury stock) as of the period-end: November 30, 2021: 24,331,356 shares Feb. 28, 2021: 29,331,356 shares 2. Total number of treasury stock as of the period-end: November 30, 2021: 2,897,922 shares Feb. 28, 2021: 2,911,168 shares 3. Average number of shares for the period (Cumulative total for the quarterly consolidated period) FY2021 Nine-Month Period: 21,428,376 shares FY2020 Nine-Month Period: 21,694,081 shares Note: The number of recorded treasury stock includes 83,926 of the Company’ shares held by the Shares Grant Trust for Officers as of the end of the third quarter of the fiscal year. The financial statement summary is not subject to auditing by certified public accountants or audit firms. Explanation concerning the Proper Use of Operating Results Forecasts and Other Relevant Specific Items 1. The forecasts of operating results and other items concerning the future contained in this document are based on management’s assumptions and beliefs that are determined to be reasonable in light of currently available information, YONDOSHI HOLDINGS INC. cautions readers that due to a variety of factors actual results may differ materially from forecasts. For the assumptions that underpin operating results forecasts as well as cautionary notes on the use of operating results forecasts, please refer to “1. Qualitative Information on Business and Financial Results (3) Explanation of Consolidated Results Forecasts and Other Future Predictions” on page 4. – 2 – Contents 1. Qualitative Information on Business and Financial Results (1) Explanation of Business Results (2) Explanation of Financial Condition (3) Explanation of Consolidated Results Forecasts and Other Future Predictions 2. Consolidated Quarterly Financial Statements (1) Consolidated Quarterly Balance Sheets (2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income Consolidated Quarterly Statements of Income Third Quarter Cumulative Consolidated Quarterly Statements of Comprehensive Income Third Quarter Cumulative (3) Notes to Consolidated Quarterly Financial Statements (Notes Regarding Going Concern Assumptions) (Notes Regarding Substantial Changes in Shareholders’ Equity) (Changes in the Scope of Consolidation or Application of the Equity Method) (Application of Special Accounting Treatment in the Preparation of the Consolidated Financial Statements) (Additional Information) (Segment Information) (Important Subsequent Events) 4 4 4 4 5 5 7 7 8 9 9 9 9 9 9 10 11 – 3 – 1. Qualitative Information on Business and Financial Results (1) Explanation of Business Results During the third quarter cumulative period (March 1, 2021, to November 30, 2021) of fiscal 2021 (ending February 28, 2022), conditions throughout the Japanese economy remained severe. With little sign of the COVID-19 pandemic abating, the Japanese government issued a series of intermittent emergency declarations and priority measures, and although these measures were lifted nationwide on October 1, concerns over a resurgence persisted. In the retail industry, the outlook remained clouded as a result of the impact from the government’s call for people to remain at home, along with business suspensions and shortened operating hours at stores. In addition, even after the lifting of emergency measures, the employment and income situation failed to improve, leading to further cooling off in consumer sentiment and a slowdown in spending. Under these circumstances, during fiscal 2021, the initial year of the sixth medium-term management plan, YONDOSHI HOLDINGS Group is working to provide products and services that exceed customer expectations, and achieve further growth, by leveraging the strengths of the corporate group to the fullest extent. In addition, the Company is practicing CSR-based management to establish a highly trusted corporate group, and is working to enhance enterprise value by strengthening internal controls, providing shareholder returns, and making medium to long-term investments linked to earnings growth. As a result, for the subject third quarter cumulative period, net sales amounted to ¥27,323 million (down 3.5% from the same period of the previous fiscal year), with operating income of ¥695 million (down 62.9%), ordinary income of ¥1,169 million (down 47.1%), and profit attributable to owners of parent of ¥600 million (down 49.5%). Operating income before the amortization of goodwill, which has been designated an important management indicator, amounted to ¥1,068 million (down 50.1%). Operating results by business segment were as follows. Jewelry Business The F.D.C. Products Group, which operates the jewelry business, faced a harsh business environment stemming from the prolonged state of emergency in response to the spread of COVID -19. Sales of fashion jewelry recovered after the lifting of the emergency declaration in October, but a recovery in bridal jewelry will require more time. In addition, operating income decreased significantly due to a reactionary increase in personnel expenses, a portion of which was recorded as an extraordinary loss in the corresponding period of the previous fiscal year. As a result, net sales in the Jewelry Business amounted to ¥12,131 million (down 12.3% from the same period of the previous fiscal year), with operating income of ¥116 million (down 90.5%). Apparel Business Retailer age Co., Ltd., operator of the everyday fashion brand PALETTE, achieved record-high net sales and operating income as a result of opening eight new stores, along with the success of its sales promotion campaigns and 25th anniversary events. The AS’TY Group experienced a temporary slowdown in demand due to the COVID -19 crisis, but continued with measures to strengthen its product planning capabilities. As a result, net sales in the Apparel Business segment amounted to ¥15,192 million (up 4.8% from the same period of the previous fiscal year), with operating income of ¥872 million (down 6.2%). (2) Explanation of Financial Condition Total assets at the end of the subject third quarter cumulative period (November 30, 2021) amounted to ¥54,203 million, an increase of ¥1,202 million from the end of the previous fiscal year (February 28, 2021). This was due mainly to an increase of ¥844 million in investment securities. Total liabilities amounted to ¥15,630 million, an increase of ¥2,173 million from the end of the previous fiscal year. This was due mainly to an increase of ¥1,700 million in short-term loans payable. Total net assets at the end of the subject period amounted to ¥38,572 million, a decrease of ¥970 million from the end of the previous fiscal year. This was due mainly to a decrease of ¥1,161 million in retained earnings. (3) Explanation of Consolidated Results Forecasts and Other Future Predictions For consolidated results forecasts for fiscal 2021 (ending February 28, 2022), see “Notice of Revision to Fiscal 2021 Forecasts” released today (January 6, 2022). – 4 – 2. Consolidated Quarterly Financial Statements (1) Consolidated Quarterly Balance Sheets Cash and deposits ASSETS Current assets: Notes and accounts receivable ― trade Merchandise and finished goods Work in process Other current assets Allowance for doubtful accounts Raw materials and supplies Total current assets Noncurrent assets: Property, plant and equipment: Buildings and structures, net Land Other, net Total property, plant and equipment Intangible assets: Goodwill Other intangible assets Total intangible assets Investments and other assets: Investment securities Net defined benefit asset Other Allowance for doubtful accounts Total investments and other assets Total noncurrent assets Total assets End of the Fiscal Year Ended February 28, 2021 (As of February 28, 2021) (Millions of yen) End of the Third Quarter of the Fiscal Year Ending February 28, 2022 (As of November 30, 2021) 3,232 2,587 7,718 285 1,081 713 (3) 15,616 4,982 5,492 538 11,013 2,730 201 2,932 18,489 487 4,516 (55) 23,438 37,383 53,000 2,313 3,332 8,712 324 779 1,152 (4) 16,610 4,698 5,492 418 10,608 2,358 306 2,664 19,333 513 4,523 (51) 24,319 37,592 54,203 – 5 – ５．（要約）四半期連結財務諸表(Millions of yen) End of the Fiscal Year Ended February 28, 2021 (As of February 28, 2021) End of the Third Quarter of the Fiscal Year Ending February 28, 2022 (As of November 30, 2021) 3,148 － 643 269 25 － 2,715 6,802 123 497 1,428 4,605 6,654 13,457 2,486 7,208 31,978 (6,215) 35,458 4,315 8 (233) 75 (110) 4,055 29 39,543 53,000 4,041 1,700 206 371 38 12 2,519 8,889 133 507 1,428 4,670 6,740 15,630 2,486 7,196 30,817 (6,175) 34,325 4,545 9 (233) 1 (99) 4,223 23 38,572 54,203 LIABILITIES Current liabilities: Short-term loans payable Income taxes payable Provision for bonuses Provision for directors’ bonuses Notes and accounts payable ― trade Asset retirement obligations Other Total current liabilities Noncurrent liabilities: Provision for share-based remuneration for directors (and other officers) Retirement benefit liability Asset retirement obligations Other Total noncurrent liabilities Total liabilities NET ASSETS Shareholders’ equity: Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Other accumulated comprehensive income: Valuation difference on available-for-sale securities Deferred gains or losses on hedges Revaluation reserve for land Foreign currency translation adjustments Remeasurements of defined benefit plans Total other accumulated comprehensive income Subscription rights to shares Total net assets Total liabilities and net assets – 6 – (2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income Consolidated Quarterly Statements of Income Third Quarter Cumulative Nine-Month Period of the Fiscal Year Ended February 28, 2021 (March 1, 2020 to November 30, 2020) (Millions of yen) Nine-Month Period of the Fiscal Year Ending February 28, 2022 (March 1, 2021 to November 30, 2021) Net sales Cost of Sales Gross profit Selling, general and administrative expenses Operating income Non-operating income Interest income Dividends received Rent of real estate for investment Foreign exchange gains Reversal of allowance for doubtful accounts Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Depreciation of real estate for investment Management cost for real estate for investment Foreign exchange losses Commission for purchase of treasury shares Provision of allowance for doubtful accounts Loss on cancellation of insurance policies Depreciation of inactive non-current assets Other Total non-operating expenses Ordinary income Extraordinary income Gain on sales of investment securities Gain on reversal of share acquisition rights Subsidies for employment adjustment Reversal of loss on liquidation of subsidiaries Gain on reversal of foreign currency adjustment Total extraordinary income Extraordinary loss Impairment loss Loss on closing of stores Allowance for absence from work Loss on liquidation of subsidiaries Loss on liquidation of brands Loss on valuation of investment securities Total extraordinary losses Net income before income taxes Total income taxes Net income Profit attributable to owners of parent translation – 7 – 28,323 13,097 15,226 13,351 1,874 101 140 54 ― ― 19 45 362 2 3 7 2 1 2 4 ― 2 26 22 52 462 28 ― 566 108 27 405 6 121 75 745 2,032 843 1,188 1,188 27,323 13,075 14,248 13,552 695 59 153 54 26 0 159 41 495 0 3 1 ― ― ― 2 12 1 21 ― ― 64 ― 60 125 188 ― 61 ― ― 36 286 407 600 600 1,008 2,210 1,169 Consolidated Quarterly Statements of Comprehensive Income Third Quarter Cumulative Nine-Month Period of the Fiscal Year Ended February 28, 2021 (March 1, 2020 to November 30, 2020) (Millions of yen) Nine-Month Period of the Fiscal Year Ending February 28, 2022 (March 1, 2021 to November 30, 2021) Income before minority interests Other comprehensive income Other valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustments Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of the parent 1,188 973 (9) 22 4 991 2,180 2,180 600 230 0 (74) 11 168 769 769 – 8 – (3) Notes to Consolidated Quarterly Financial Statements (Notes Regarding Going Concern Assumptions) Not applicable (Notes Regarding Substantial Changes in Shareholders’ Equity) Not applicable (Changes in the Scope of Consolidation or Application of the Equity Method) During the subject period, F&A AQUA shanghai, inc. was removed from the scope of consolidation following liquidation. (Application of Special Accounting Treatment in the Preparation of the Consolidated Financial Statements) (Calculation of Tax Expense) Tax expense has been calculated by rationally estimating the effective tax rate after the application of tax effect accounting for profit before income taxes in the consolidated fiscal year, including the subject third quarter period, and multiplying this estimated effective tax rate by profit before income taxes. (Additional Information) (Stock Compensation Plan for Directors) Under its 68th annual shareholders meeting held on May 17, 2018, the Company introduced a stock compensation plan (hereinafter, the “Plan”), with eligible persons the Company’s directors (excluding directors who are audit and supervisory committee members) and directors who are audit and supervisory committee members (excluding outside directors), as well as directors and corporate auditors (excluding outside corporate auditors) of the Company’s major group companies from November 28, 2018. i. Summary of the transaction The Plan is a stock compensation plan to grant the Company’s shares to eligible directors of eligible companies in accordance with rules for granting trust-based stock compensation to corporate officers as determined by the eligible companies. The Company will contribute funds to the trust, and the trust will use these funds to acquire the Company’s shares, and grant them to eligible directors. In principle, directors and other officers will receive the Company’s shares at the time of retirement. ii. The Company’s own shares held in the Trust The Company’s own shares held in the Trust are recorded as treasury stock under net assets at their book value in the Trust (excluding the amount of ancillary expenses). The book value and number of shares of such treasury stock was ¥144 million, for 67,136 shares at the end of the previous consolidated fiscal year, and ¥168 million, for 83,926 shares at the end of the third quarter of the subject consolidated fiscal year. (Accounting Estimates) There are no significant changes in the assumptions regarding the impact from the COVID-19 virus or accounting estimates from those presented in the (Additional Information) – (Accounting Estimates) section of the financial statement for the previous fiscal year. – 9 – (Segment Information) Ⅰ The nine-month period of the fiscal year ended February 28, 2021 (March 1, 2020 to November 30, 2020) 1. Information Regarding Sales and Income or Loss by Reporting Segment Reporting Segments Jewelry Business Apparel Business Total Net sales Net sales to outside customers Intrasegment net sales and transfers Total Segment income 13,824 0 13,824 1,224 14,499 148 14,647 929 28,323 148 28,472 2,154 Adjustment amount (Note 1) (Millions of yen) Amount recorded on consolidated quarterly statements of income (Note 2) ― (148) (148) (280) 28,323 ― 28,323 1,874 Notes: 1. The adjustment amount of minus ¥280 million for segment income mainly includes amortization of goodwill totaling minus ¥372 million, general administrative expenses that are not attributable to individual reporting segments amounting to minus ¥406 million and elimination of inter-segment transactions of ¥498 million. Corporate expenses are primarily general administrative expenses not attributable to reporting segments. 2. Segment income figures have been adjusted to operating income on the consolidated quarterly income statements. 2. Information Regarding Impairment Loss of Fixed Assets, Goodwill and Related Items by Reporting Segment There was no major impairment loss recorded during the period under review. Ⅱ The nine-month period of the fiscal year ending February 28, 2022 (March 1, 2021 to November 30, 2021) 1. Information Regarding Sales and Income or Loss by Reporting Segment Reporting Segments Jewelry Business Apparel Business Total Net sales Net sales to outside customers Intrasegment net sales and transfers Total Segment income 12,131 0 12,131 116 15,192 103 15,295 872 27,323 103 27,427 988 Adjustment amount (Note 1) (Millions of yen) Amount recorded on consolidated quarterly statements of income (Note 2) ― (103) (103) (292) 27,323 ― 27,323 695 Notes: 1. The adjustment amount of minus ¥292 million for segment income mainly includes amortization of goodwill totaling minus ¥372 million, general administrative expenses that are not attributable to individual reporting segments amounting to minus ¥358 million and elimination of inter-segment transactions of ¥438 million. Corporate expenses are primarily general administrative expenses not attributable to reporting segments. 2. Segment income figures have been adjusted to operating income on the consolidated quarterly income statements. 2. Information Regarding Impairment Loss of Fixed Assets, Goodwill and Related Items by Reporting Segment (Major Impairment Loss Relating to Fixed Assets) An impairment loss relating to fixed assets was posted in the Jewelry Business segment. The posted value of this impairment loss during the third quarter cumulative period of the fiscal year under review was ¥153 million. – 10 – (Important Subsequent Events) Not applicable – 11 –