Summary of Consolidated Financial Results for the Three Months Ended November 30, 2022 (Japanese GAAP) January 13, 2022 MEIKO NETWORK JAPAN CO., LTD. The First Section of the Tokyo Stock Exchange 4668 Kazuhito Yamashita, President & Representative Director Kouyuki Sakamoto, Executive Officer, General Manager of Corporate Planning Department +81-3-5860-2111 （URL：https://www.meikonet.co.jp） Company name: Listing: Securities code: Representative: Inquiries: Telephone: Scheduled date to file quarterly securities report: Scheduled date to commencement dividend payment: Preparation of supplementary material on quarterly financial results: None Holding of quarterly financial results briefing: None January 14, 2022 – (Yen amounts are rounded down to millions) 1. Consolidated financial results for the three months ended November 30, 2021 (from September 1, 2021 to November 30, (1) Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % 4,591 2.0 4,502 (5.1) 360 (9.1) 396 21.0 383 (14.9) 450 13.0 629 102.1 311 59.0 2021) Three months ended November 30, 2021 November 30, 2020 (Note) Comprehensive income: Three months ended November 30, 2021: ¥665 million [119.8 %] Three months ended November 30, 2020: ¥302 million [(57.2) %] Basic earnings per share Diluted earnings per share Three months ended November 30, 2021 November 30, 2020 (2) Consolidated financial position Yen 25.08 12.41 Yen － － As of November 30, 2021 August 31, 2021 (Reference) Equity: As of November 30, 2021: As of August 31, 2021: 2. Cash Dividends Millions of yen Millions of yen 15,103 14,649 10,425 10,025 ¥10,425 million ¥10,025 million Total assets Net assets Equity-to-asset ratio % 69.0 68.4 First quarter-end Second quarter-end Yen Third quarter-end Yen Fiscal year-end Total Annual dividends per share Yen － － 10.00 11.00 － － Yen 10.00 11.00 Fiscal year ended August 31, 2021 Fiscal year ending August 31, 2022 Fiscal year ending August 31, 2022 (Forecast) (Note) Revision of dividend forecast in the current quarter: None 3. Consolidated Financial Results Forecast for Fiscal Year Ending August 31, 2022 (from September 1, 2021 to August 31, 2022) First half (cumulative) Net sales Operating profit Ordinary profit Millions of yen ％ Millions of yen ％ Millions of yen ％ Millions of yen ％ 10,100 3.6 952 2.3 1,017 0.1 967 45.1 (% indicates year-on-year changes) Profit attributable to owners of parent Basic earnings per share Full-year (Note) Revision to the financial results forecast announced most recently: Yes 19,800 4.0 1,040 7.3 1,114 0.0 1,025 (10.1) Yen 20.00 22.00 yen 38.55 40.86 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20221consolidation): None *Notes: (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in the scope of (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies caused by revision of accounting standards: Yes (ii) Changes in accounting policies due to other reasons: (iii) Changes in accounting estimates: None None (iv) Restatement: None (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of November 30, 2021 (ii) Number of treasury shares at the end of the period As of August 31, 2021 As of November 30, 2021 As of August 31, 2021 Three months ended November 30, 2021 Three months ended November 30, 2020 (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) 27,803,600 shares 27,803,600 shares 2,720,058 shares 2,720,058 shares 25,083,542 shares 25,083,622 shares * Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters Forward-looking statements in the document, such as earnings forecasts, are based on the information currently available and certain assumptions that the company thinks reasonable. Actual results may differ remarkably from the statements due to variety of different factors. Summary of Consolidated Financial Results for the Three Months Ended November 30, 20222（Reference）Trend of numbers of Meiko Gijuku schools and registered students and system-wide sales Term Fiscal Period Three months ended November 30, 2020 From Sep. 1, 2020 to Nov. 30, 2020 YOY comparison Operating results Three months ended November 30, 2021 From Sep. 1, 2021 to Nov. 30, 2021 YOY comparison Operating results Number of Meiko Gijuku directly operated schools 208 (15) 207 Number of Meiko Gijuku directly operated schools (MAXIS) Number of Meiko Gijuku directly operated schools (KLINE) Number of Meiko Gijuku directly operated schools (TOMONI)*3 Number of Meiko Gijuku directly operated schools (One link) Number of Meiko Gijuku directly operated schools Number of Meiko Gijuku franchised schools Total number of Meiko Gijuku schools Number of registered students of Meiko Gijuku directly operated schools Number of registered students of Meiko Gijuku directly operated schools (MAXIS) Number of registered students of Meiko Gijuku directly operated schools (KLINE) Number of registered students of Meiko Gijuku directly operated schools (TOMONI)*3 Number of registered students of Meiko Gijuku directly operated schools (One link) Number of registered students of Meiko Gijuku directly operated schools Number of registered students of Meiko Gijuku franchised Schools 93 41 42 21 405 1,437 1,842 +1 － (1) +21 +6 (93) (87) 93 41 42 21 404 1,362 1,766 14,523 (1,113) 15,187 +664 6,977 (31) 7,027 +50 2,766 +57 2,976 +210 2,187 (164) 2,283 867 +867 948 27,320 (384) 28,421 +1,101 81,310 (7,983) 76,379 (4,931) Total number of registered students of Meiko Gijuku schools 108,630 (8,367) 104,800 (3,830) Sales from Meiko Gijuku directly operated schools (Millions of yen) 2,605 +213 2,589 Sales from Meiko Gijuku franchised schools *1 (Millions of yen) 1,026 (75) 1,082 Sales from Japanese language schools (Millions of yen) (Millions of yen) 191 679 (189) (188) 185 734 (Millions of yen) 4,502 (240) 4,591 Sales from others Total Sales Sales from Meiko Gijuku directly operated schools (Millions of yen) 2,605 +213 2,589 System-wide sales from Meiko Gijuku franchised schools (Millions of yen) 6,408 (502) 6,010 (398) Total system-wide sales from Meiko Gijuku schools *2 (Millions of yen ) 9,014 (288) 8,599 (415) 1 2 Sales from Meiko Gijuku franchised schools represent royalty revenues and sales of products. Total system-wide sales from Meiko Gijuku schools represent the sum of total sales of Meiko Gijuku directly operated schools, including tuition, materials fees, and examination fees, and the total sales of Meiko Gijuku franchised schools, including tuition. Materials fees and examination fees of franchised schools are excluded. 3 K.M.G Corporation Co., Ltd has changed its name to TOMONI Co., Ltd. as of September 1, 2021. * (1) － － － － (1) (75) (76) +96 +81 (16) +56 (6) +54 +88 (16) Summary of Consolidated Financial Results for the Three Months Ended November 30, 20223Quarterly Consolidated Financial Statements and Major Notes (1) Quarterly consolidated statement of Balance Sheets Previous consolidated fiscal year (As of Aug. 31, 2021) (Millions of yen) Quarterly Consolidated Accounting Period (As of Nov. 30, 2021) Assets Current assets Cash and deposits Accounts receivable – trade Accounts receivable and contract assets Securities Merchandise Work in process Supplies Advance payments to suppliers Prepaid expenses Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Land Leased assets Accumulated depreciation Leased assets, net Total property, plant and equipment Intangible assets Goodwill Software Software in progress Telephone subscription right Total intangible assets Investments and other assets Investment securities Long-term prepaid expenses Deferred tax assets Leasehold and guarantee deposits Other Total investments and other assets Total non-current assets Total assets 10,441 8,727 767 － 200 114 13 7 19 303 322 (33) 1,145 (676) 375 (322) 469 531 52 0 10 (1) 8 203 190 4 4 402 2,022 42 226 942 40 3,274 4,207 14,649 9,271 － 946 100 98 8 8 14 274 192 (33) 10,879 1,153 (677) 476 371 (317) 54 0 10 (2) 8 538 185 156 － 4 346 2,075 38 274 910 40 3,338 4,223 15,103 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20224 Previous consolidated fiscal year (As of Aug. 31, 2021) (Millions of yen) Quarterly Consolidated Accounting Period (As of Nov. 30, 2021) 3,876 (1) Quarterly consolidated statement of Balance Sheets Liabilities Current liabilities Accounts payable – trade Accounts payable – other Accrued expenses Income taxes payable Accrued consumption taxes Advances received Contract liabilities Lease obligations Deposits received Provision for bonuses Other Total current liabilities Non-current liabilities Retirement benefit liability Provision for share awards for directors (and other officers) Provision for share awards Long-term accounts payable-other to employees Long-term accounts payable-other to officers Deferred tax liabilities Lease obligations Asset retirement obligations Long-term guarantee deposits Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Total net assets Total liabilities and net assets 119 102 1,139 427 331 1,242 － 1 54 404 51 111 11 34 104 117 18 7 339 1 747 972 909 10,529 (2,779) 9,632 377 15 392 10,025 14,649 164 92 897 436 251 － 1,296 1 201 563 29 3,935 111 15 34 100 117 16 7 337 1 743 972 909 10,893 (2,779) 9,995 415 13 429 10,425 15,103 4,624 4,678 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20225(2) Quarterly Consolidated statements of profit or loss and comprehensive income Quarterly Consolidated statements of profit or loss Three months ended November 30, 2020 (from Sep. 1, 2020 to Nov. 30, 2020) (Millions of yen) Three months ended November 30, 2021 (from Sep. 1, 2021 to Nov. 30, 2021) Net sales Cost of sales Gross profit 4,502 3,336 1,166 769 396 2 6 5 15 23 2 55 1 0 1 53 － 53 0 － － 0 450 503 220 (28) 192 311 311 Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Rental income Reversal of allowance for doubtful accounts Subsidy income Other Total non-operating income Non-operating expenses Rental expenses Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of investment securities Gain on sale of shares of subsidiaries and associates Total extraordinary income Extraordinary losses Loss on retirement of property, plant and equipment Extra retirement payments Other Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to owners of parent 4,591 3,461 1,130 769 360 1 8 3 1 4 3 0 0 0 23 383 － 623 623 － 24 3 28 978 411 (61) 349 629 629 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20226 Quarterly consolidated statements of comprehensive income Profit Other comprehensive income Valuation difference on available-for-sale securities Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Three months ended November 30, 2020 (from Sep. 1, 2020 to Nov. 30, 2020) (Millions of yen) Three months ended November 30, 2021 (from Sep. 1, 2021 to Nov. 30, 2021) 311 (8) 0 (8) 302 302 629 38 (1) 36 665 665 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20227Segment Information Ⅰ Three months ended November 30, 2020 (September 1, 2020 to November 30, 2020) 1．Information related to net sales, profit or loss for each reportable segment. Reportable segment (Millions of yen) Meiko Gijuku directly operated schools Meiko Gijuku franchised schools Japanese language schools Others* Total Total Net sales external sales Inter-segment sales and transfers Total Segment profit (loss) 2,605 － 2,605 145 1,026 203 1,230 462 191 － 191 3,823 679 4,502 203 6 210 4,027 685 4,713 (22) 584 77 662 (Note)* “Others” consists of the operating segments not included in reportable segments. It includes Kids Business (Afterschool), Waseda Academy Kobetsu Schools, MEIKO Kids e business, Jiritsugausyu RED and other businesses of consolidated subsidiaries. 2．Difference between the Total of the Reportable Segments’ Measures of Profit or Loss and Income according to Consolidated Quarterly Statements of Income, and the Main Components of the Difference (Matters related to Adjustment of Difference) Profit (Loss) Amount Reportable segment total Profit (Loss) for “Others” category Corporate expenses* Operating profit reported on quarterly statements of income (Note)* Corporate expenses are mainly expenses that relate to the General Affairs section of the parent company that are not attributable to the reportable segment. 3. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment No applicable items. (Millions of yen) 584 77 (265) 396 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20228 Ⅱ Three months ended November 30, 2021 (September 1, 2021 to November 30, 2021) 1．Information about Segment Sales and Income (Loss) Reportable segment Meiko Gijuku directly operated schools Meiko Gijuku franchised schools Japanese language schools (Millions of yen) Total Others* Total Net sales Goods or services that are transferred at a point in time Goods or services that are transferred over a fixed period of time Revenue from a contract with a customer Other income Sales to external customers Intersegment transfers sales and Total Segment profit (loss) 180 2,409 2,589 － 2,589 － 2,589 70 385 697 1,082 － 1,082 216 1,299 525 － 185 185 － 185 － 185 (60) 565 455 1,021 3,291 278 3,570 3,857 － 3,857 216 4,073 535 734 － 734 5 739 122 4,591 － 4,591 221 4,812 658 (Note)* “Others” consists of the operating segments not included in reportable segments. It includes Kids Business (Afterschool), Waseda Academy Kobetsu Schools, Jiritsugakusyu RED, Meiko Kids e Business, recruitment and temporary staffing, training programs and other businesses of consolidated subsidiaries. 2．Difference between the Total of the Reportable Segments’ Measures of Profit or Loss and Income according to Consolidated Quarterly Statements of Income, and the Main Components of the Difference (Matters related to Adjustment of Difference) Profit (Loss) Amount Reportable segment total Profit (loss) for “Others” category Corporate expenses* Operating profit reported on quarterly statements of income (Note)* Corporate expenses are mainly expenses that relate to the General Affairs section of the parent company that are not attributable to the reportable segment. 3. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment No applicable items. 4. Matters related to changes in reportable segments As described in “Changes in accounting policies,” the Company has applied the Accounting Standard for Revenue Recognition from the beginning of the first quarter of the current fiscal year. The method of calculating profit or loss for business segments has been changed as well. As a result of this change, net sales and segment income of the Meiko Gijuku franchised school business for the first quarter of the fiscal year under review were 5 million yen higher than they would have been under the previous method. Net sales and segment income of “Other” increased by 9 million yen each. (Millions of Yen) 535 122 (297) 360 Summary of Consolidated Financial Results for the Three Months Ended November 30, 20229
