関通（9326） – [Delayed]Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 28, 2022(Nine Months Ended November 30, 2021)

January 14, 2022 Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 28, 2022 (Nine Months Ended November 30, 2021) Company name: KANTSU CO., LTD. 9326 Securities code: Representative: Hisahiro Tatsushiro, Representative Director and President Contact: Tadashi Katayama, Managing Director Scheduled date of filing of Quarterly Report: Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: Yes Holding of quarterly financial results meeting: None January 14, 2022 – [Japanese GAAP] Listing: Tokyo Stock Exchange (Mothers) URL: https://www.kantsu.com/ Tel: +81-6-6224-3361 (All amounts are rounded down to the nearest million yen) 1. Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 28, 2022 (March 1, 2021 – November 30, 2021) (1) Results of operations Nine months ended Nov. 30, 2021 Nine months ended Nov. 30, 2020 Net sales Million yen 7,567 6,779 % 11.6 27.4 Operating profit Million yen 559 210 165.5 19.3 Ordinary profit % Million yen 530 184 % 186.9 19.8 Profit Million yen 365 134 % 171.9 28.7 (Percentages represent year-on-year changes) Net income per share Diluted net income per share Nine months ended Nov. 30, 2021 Nine months ended Nov. 30, 2020 Note: KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. Net income per share and diluted net income per share have been calculated as if this stock split had taken place at the beginning of the fiscal year ended February 28, 2021. Yen 36.15 15.28 Yen 34.77 14.30 Total assets Net assets Equity ratio Million yen 8,550 7,532 Million yen 2,628 1,595 % 30.7 21.1 As of Feb. 28, 2021: 1,591 million yen As of Nov. 30, 2021: 2,628 million yen 1Q-end 2Q-end Year-end Total FY2/21 FY2/22 FY2/22 (forecast) Note: Revision to the most recently announced dividend forecast: None 3. Earnings Forecast for the Fiscal Year Ending February 28, 2022 (March 1, 2021 – February 28, 2022) Yen – – Yen 0.00 0.00 Yen 0.00 0.00 Yen – – Yen 0.00 0.00 Dividends per share 3Q-end Net sales Operating profit Ordinary profit % Million yen Full year 635 Notes: 1. Revision to the most recently announced earnings forecast: None % Million yen 670 Million yen 10,756 12.9 60.4 (Percentages represent year-on-year changes) Net income per share Yen 42.27 % Million yen 428 % 51.5 Profit 65.7 2. KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. The net income per share forecast for the fiscal year ending February 28, 2022 is adjusted to reflect the stock split. (2) Financial position As of Nov. 30, 2021 As of Feb. 28, 2021 Reference: Shareholders’ equity 2. Dividends * Notes (1) Application of special accounting methods for presenting quarterly non-consolidated financial statements: Yes (2) Changes in accounting policies and accounting-based estimates, and restatements 1) Changes in accounting policies due to revisions in accounting standards, others: 2) Changes in accounting policies other than 1) above: 3) Changes in accounting-based estimates: 4) Restatements: (3) Number of outstanding shares (common shares) None None None None 1) Number of shares outstanding at the end of the period (including treasury shares) As of Nov. 30, 2021: 10,262,400 shares As of Feb. 28, 2021: 9,546,000 shares 2) Number of treasury shares at the end of the period As of Nov. 30, 2021: 93 shares As of Feb. 28, 2021: – shares 3) Average number of shares outstanding during the period Nine months ended Nov. 30, 2021: 10,108,156 shares Note: KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. The number of shares outstanding at the end of the period (including treasury shares), the number of treasury shares at the end of the period and the average number of shares outstanding during the period have been calculated as if this stock split had taken place at the beginning of the fiscal year ended February 28, 2021. Nine months ended Nov. 30, 2020: 8,792,175 shares The current financial report is not subject to quarterly review by certified public accountants or auditing firms. Explanation of appropriate use of earnings forecasts, and other special items Cautionary statement with respect to forward-looking statements Earnings forecasts and other forward-looking statements in this document are based on information that was available when this information was announced and on assumptions as of the announcement date concerning uncertainties that may affect results of operations in the future. Consequently, these statements are not promises by KANTSU regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to “1. Qualitative Information on Quarterly Non-consolidated Financial Performance, (3) Explanation of Non-consolidated Forecast and Other Forward-looking Statements” on page 4 for forecast assumptions and notes of caution for usage. How to view supplementary information materials for financial results The supplementary information materials for financial results will be available on KANTSU’s website (https://www.kantsu.com/ir/) on January 14, 2022. KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 Contents of Attachments 1. Qualitative Information on Quarterly Non-consolidated Financial Performance (1) Explanation of Results of Operations (2) Explanation of Financial Position (3) Explanation of Non-consolidated Forecast and Other Forward-looking Statements 2. Quarterly Non-consolidated Financial Statements and Notes (1) Quarterly Non-consolidated Balance Sheet (2) Quarterly Non-consolidated Statement of Income For the Nine-month Period (3) Notes to Quarterly Non-consolidated Financial Statements Going Concern Assumption Significant Changes in Shareholders’ Equity Application of Special Accounting Methods for Presenting Quarterly Non-consolidated Financial Statements Segment and Other Information 2 2 4 4 5 5 6 6 7 7 7 7 7 1 KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 1. Qualitative Information on Quarterly Non-consolidated Financial Performance Forward-looking statements are based on the judgments of KANTSU as of November 30, 2021. (1) Explanation of Results of Operations During the first nine months of the current fiscal year (March 1 to November 30, 2021), the Japanese government began to ease restrictions on various activities because of signs of a decline in the number of COVID-19 cases that started around September. However, the outlook for the economy is still uncertain because of worries about the risk of another wave of infections. In the logistics sector, the business climate remains challenging as the pandemic continues along with worries about the possibility of another wave of infections. Teleworking with some limitations is now firmly established at many companies and companies are increasing the use of the internet to sell products and ser vices. All of these trends continued during the third quarter of the current fiscal year. To meet this demand, we continued to add and expand distribution centers for establishing an infrastructure for receiving orders from new customers. We also increased search engine optimization (SEO) measures and took other actions for effectively using the internet to start providing services to new customers. The current fiscal year is the first year of the medium-term business plan that ends in February 2024. Based on this plan, there have been many activities to provide services for the growing e-commerce market. Two major strategies for growth are the construction of large refrigerated and frozen warehouses and measures to grow rapidly as an IT vendor. Due to these activities, sales increased 11.6% year-on-year to 7,567 million yen, operating profit increased 165.5% to 559 million yen, ordinary profit increased 186.9% to 530 million yen and profit increased 171.9% to 365 million yen. Business segment performance was as follows. Business segment sales are sales to external customers and segment profit or loss is based on operating profit in the quarterly income statement. In prior years, there was the single reportable segment of logistics services and all other acti vities were categorized as others. Beginning with the first quarter of the fiscal year ending in February 2022, the software sales and use services category which was previously included in the logistic services segment has been separately disclosed in a reportable segment called IT automation. Results of operations in the first nine months of the previous fiscal year have been restated to facilitate direct comparisons with performance in the current fiscal year. Previous reportable segments Reportable segment Logistics services business Main Services EC/catalog logistics support services, Rakuten Super Logistics services, the Cloud Thomas warehouse management system, the Annie check list system, outsourced order processing services and logistics consulting services Note: In addition to the logistics services business, there was a segment called others for activities not included in this reportable segment. Others was primarily technology education services for foreign trainees and other education services. Revised reportable segments Reportable segment Logistics services business IT automation business Main Services EC/catalog logistics support services, Rakuten Super Logistics services, outsourced order processing services and logistics consulting services The Cloud Thomas warehouse management system, the Annie check list system, the e.can system for the automatic processing of orders received and the ippo! service for outsourced robotic process automation (RPA) production Note: In addition to the above businesses, there is a segment called others for activities not included in these reportable segments. Others is primarily technology education services for foreign trainees and other education services. 2 KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 Logistics services business To increase customer satisfaction, improvement activities aimed at raising productivity continued with emphasis on EC/catalog logistics support services. Cargo transport sales decreased because of the switch to different contracts with some customers. Sales benefited from activities to receive orders from new customers. Most significant are the April 2021 completion of a new EC/Catalog Distribution Center in the city of Amagasaki in Hyogo prefecture (about 18,500 square meters) and the June 2021 completion of a D-to-C (direct-to-consumer) Distribution Center in Amagasaki (about 17,200 square meters). In addition, we plan to begin operating a refrigerated and frozen warehouse at the EC/Catalog Distribution Center in Amagasaki in January 2022 and the Tokyo Primary Center in the city of Niiza in Saitama prefecture (about 27,400 square meters) in February 2022. To receive orders involving the use of these two centers from new customers, we reinforced SEO and other measures for the effective use of the internet. As a result, net sales increased 10.0% year-on-year to 7,175 million yen and segment profit increased 285.9% to 466 million yen. IT automation business There were strong sales of the Cloud Thomas warehouse management system to new customers . In addition, there were sales of logistics automation hardware associated with new Cloud Thomas users. We also strengthened capabilities for support services, including by increasing the number of support service personnel, to build an even stronger framework for sales activities. Although there was no big change in the number of companies using the Annie check list system, the number of orders increased for the e.can system for the automatic processing of orders received and for the ippo! service for outsourced RPA production. As a result, net sales increased 69.8% year-on-year to 319 million yen and segment profit increased 2.2% to 99 million yen. Other businesses Technology education services for foreign trainees was unable to operate mainly because of the suspension of operations of schools in Myanmar due to the COVID-19 crisis. However, other educational services performed well because the pandemic did not have a significant impact on these activities. As a result, sales, including the service for helping people with developmental disabilities find jobs that was launched in December 2020, were firm. As a result, net sales increased 7.2% year-on-year to 72 million yen and segment loss was 5 million yen, compared with a loss of 6 million yen one year earlier. Results by business segment for the first nine months of the fiscal year ending February 28, 2022 (Thousands of yen) Segment Net sales Segment profit (loss) (operating profit (loss)) Services Amount Comp. (%) Amount YoY change (%) Operating profit on net sales (%) YoY change (%) EC/catalog logistics support services Outsourced order processing services Others Logistics services business 7,175,630 IT automation business Other businesses 7,046,671 81,651 47,307 319,767 72,426 (27.4) 10.3 18.3 10.0 69.8 7.2 11.6 466,044 99,030 (5,774) 559,300 – – – 6.5 31.0 – 7.4 285.9 2.2 – 165.5 Total for reportable segments 7,567,824 100.0 Note: Rakuten Super Logistics services are included in EC/catalog logistics support services. 93.1 1.1 0.6 94.8 4.2 1.0 3 KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 Total assets at the end of the third quarter were 8,550 million yen, an increase of 1,017 million yen from the end of the previous fiscal year. Liabilities were 5,922 million yen, a decrease of 15 million yen and net assets were 2,628 million yen, an increase of 1,032 million yen. (2) Explanation of Financial Position The major changes are as follows. Current assets Current assets increased 565 million yen to 4,707 million yen. This was attributable primarily to a decrease of 158 million yen in accounts receivable-trade and increases of 492 million yen in cash and deposits and 198 million yen in other under current assets, which is mainly the result of appropriation for leasehold deposits at the Tokyo Primary Center (Niiza, Saitama prefecture), which is scheduled to be completed in February 2022. Non-current assets Non-current assets increased 452 million yen to 3,843 million yen. There were increases of 195 million yen in property, plant and equipment due to payments for the new refrigerated and frozen warehouse and automated warehouse at the EC/Catalog Distribution Center (Amagasaki, Hyogo prefecture), 48 million yen in intangible assets due to software development, and 159 million yen in leasehold and guarantee deposits for the payment of leasehold deposits associated with new distribution centers. Current liabilities Current liabilities decreased 60 million yen to 1,775 million yen. This was attributable mainly to a decrease of 151 million yen in accounts payable-trade, while there was an increase of 54 million yen in other under current liabilities due to an increase in accrued consumption taxes. Non-current liabilities Non-current liabilities increased 45 million yen to 4,146 million yen. There was an increase of 33 million yen in other under non-current liabilities due to an increase in long-term deposits received. Net assets Net assets increased 1,032 million yen to 2,628 million yen. Share capital and the capital surplus each increased 335 million yen because of the exercise of share acquisition rights. In addition, retained earning s increased 365 million yen because of profit in the first nine months. (3) Explanation of Non-consolidated Forecast and Other Forward-looking Statements KANTSU maintains non-consolidated full-year forecasts for the fiscal year ending February 28, 2022 that were announced on April 14, 2021. Forecasts of future performance in this report are based on assumptions judged to be valid and information available to the KANTSU’s management at the time the materials were prepared. Actual results may differ substantially from these forecasts for a number of reasons. 4 2. Quarterly Non-consolidated Financial Statements and Notes (1) Quarterly Non-consolidated Balance Sheet KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 FY2/21 (As of Feb. 28, 2021) Third quarter of FY2/22 (As of Nov. 30, 2021) (Thousands of yen) Assets Current assets Cash and deposits Electronically recorded monetary claims-operating Accounts receivable-trade Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings, net Machinery and equipment, net Land Other, net Total property, plant and equipment Intangible assets Investments and other assets Leasehold and guarantee deposits Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets Liabilities Current liabilities Accounts payable-trade Current portion of long-term borrowings Income taxes payable Provision for bonuses Provision for bonuses for directors (and other officers) Other Total current liabilities Non-current liabilities Long-term borrowings Asset retirement obligations Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Share acquisition rights Total net assets Total liabilities and net assets 5 2,592,792 155,419 1,100,638 311,075 (17,700) 4,142,224 693,263 215,606 1,125,087 292,153 2,326,110 259,933 584,074 222,890 (2,243) 804,721 3,390,765 7,532,989 472,002 813,820 109,726 30,272 – 410,186 1,836,007 3,852,065 73,177 176,448 4,101,691 5,937,699 449,606 435,606 706,285 – 1,591,498 3,792 1,595,290 7,532,989 3,085,493 185,265 942,216 509,349 (14,986) 4,707,337 717,983 214,497 1,125,087 487,350 2,544,917 308,834 743,594 248,189 (2,521) 989,262 3,843,014 8,550,351 320,598 824,340 104,802 48,527 12,398 464,594 1,775,261 3,866,547 70,112 210,282 4,146,942 5,922,204 785,299 771,299 1,071,659 (109) 2,628,147 – 2,628,147 8,550,351 (2) Quarterly Non-consolidated Statement of Income (For the Nine-month Period) KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 First nine months of FY2/21 (Mar. 1, 2020 – Nov. 30, 2020) First nine months of FY2/22 (Mar. 1, 2021 – Nov. 30, 2021) (Thousands of yen) Selling, general and administrative expenses Net sales Cost of sales Gross profit Operating profit Non-operating income Interest income Dividend income Reversal of allowance for doubtful accounts Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sales of investment securities Total extraordinary income Extraordinary losses Loss on sales of non-current assets Loss on retirement of non-current assets Total extraordinary losses Profit before income taxes Income taxes Profit 6,779,205 6,061,723 717,482 506,808 210,673 458 302 6,336 11,691 6,833 25,621 33,045 18,506 51,552 184,742 17,226 17,226 6,978 1,529 8,508 193,460 59,086 134,373 7,567,824 6,389,141 1,178,683 619,382 559,300 397 4 654 12,174 5,388 18,620 33,304 14,571 47,875 530,044 – – – 1,679 1,679 528,364 162,990 365,374 6 KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 (3) Notes to Quarterly Non-consolidated Financial Statements Going Concern Assumption Not applicable. Significant Changes in Shareholders’ Equity Share capital and the capital surplus each increased 327 million yen because of the exercise of the 4th series of share acquisition rights with an adjustable exercise price and provision for stopping the exercise of the rights, which were sold using a third-party allotment on November 6, 2020. In addition, share capital and the capital surplus each increased 8 million yen due to the issuance of new shares as restricted stock compensation and the exercise of stock options, which were resolved at the Board of Directors meeting held on June 25, 2021. As a result, share capital was 785 million yen and the capital surplus was 771 million yen at the end of the third quarter of the current fiscal year. Application of Special Accounting Methods for Presenting Quarterly Non-consolidated Financial Statements Calculation of income taxes The tax expense was calculated by first estimating the effective tax rate after the application of tax effect accounting with respect to profit before income taxes during the fiscal year, and multiplying that rate by the quarterly profit before income taxes. Segment and Other Information Segment Information I First nine months of FY2/21 (Mar. 1, 2020 – Nov. 30, 2020) 1. Information related to net sales and profit or loss for each reportable segment Reportable segment Logistics services IT automation Sub-total Others (Note 1) Total Adjustment 6,523,320 188,332 6,711,652 67,552 6,779,205 6,779,205 – – – – – Total 6,523,320 188,332 6,711,652 67,552 6,779,205 120,757 96,854 217,611 (6,938) 210,673 Notes: 1. Others are businesses that are not included in the reportable segments and mainly consist of technology education services for foreign trainees and other education services. 2. Segment profit (loss) is consistent with operating profit recorded in the quarterly non-consolidated statement of Net sales External sales Inter-segment sales and transfers Segment profit (loss) income. Not applicable. 2. Information related to impairment losses on non-current assets, or goodwill, etc. for each reportable segment (Thousands of yen) Amounts shown on quarterly non-consolidated statement of income (Note 2) – – – – – 6,779,205 210,673 7 KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22 Net sales External sales Inter-segment sales and transfers Segment profit (loss) II First nine months of FY2/22 (Mar. 1, 2021 – Nov. 30, 2021) 1. Information related to net sales and profit or loss for each reportable segment Reportable segment (Thousands of yen) Amounts shown on quarterly non-consolidated statement of income (Note 2) – – – – – 7,567,824 559,300 Logistics services IT automation Sub-total Others (Note 1) Total Adjustment 7,175,630 319,767 7,495,397 72,426 7,567,824 7,567,824 – – – – – Total 7,175,630 319,767 7,495,397 72,426 7,567,824 466,044 99,030 565,074 (5,774) 559,300 Notes: 1. Others are businesses that are not included in the reportable segment s and mainly consist of technology education services for foreign trainees and other education services. 2. Segment profit (loss) is consistent with operating profit recorded in the quarterly non-consolidated statement of income. 2. Information related to impairment losses on non-current assets, or goodwill, etc. for each reportable segment Not applicable. 3. Information concerning revisions to reportable segments Due to the increasing importance of software sales and use services, which were previously included in the logistics services segment, these activities have become a reportable segment called the IT automation beginning with the first three months of FY2/22. Segment information for the first nine months of FY2/21 is based on the revised reportable segments. This summary report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation. 8