グローリー（6457） – [Delayed] FY2021 3rd Quarter Financial Results

(TRANSLATION FOR REFERENCE ONLY) GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 This is a translation of the original Japanese text of the “Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022.” Should there be any discrepancy between any part of this translation and the original Japanese text, the latter shall prevail. Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 March 14, 2022 6457 GLORY LTD. Motozumi Miwa Yukihiro Fujikawa Senior Executive Officer; Executive General Manager, Finance Headquarters TEL +81-79-297-3131 Stock exchange listing: URL: Tokyo (1st Section) President & Representative Director Company Name: Code number: Representative: Contact person: Scheduled filing date of Quarterly Securities Report: Scheduled date of dividend payments: Preparation of quarterly earnings supplementary explanatory material: Holding of quarterly earnings presentation: March 14, 2022 ― Yes Yes (for analysts and institutional investors) https://corporate.glory-global.com/ 1. Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (from April 1, 2021 to December 31, 2021) (1) Consolidated Operating Results (cumulative) (Amounts less than one million yen are rounded downward.) Net sales (The percentages show the changes from the corresponding period of the previous year.) Net income attributable to owners of parent Operating income Ordinary income (Millions of yen) (%) (Millions of yen) (%) (Millions of yen) (%) (Millions of yen) (%) 158,709 8.7 8,639 16.7 8,864 22.1 6,688 123.8 145,966 (9.2) 7,400 (41.7) 7,263 (39.2) 2,989 (58.7) Nine months ended December 31, 2021 Nine months ended December 31, 2020 (Note) Comprehensive income Nine months ended December 31, 2021: Nine months ended December 31, 2020: ¥9,740 million [ 188.6 %] ¥3,375 million [ (46.8) %] Net income per share Fully diluted net income per share (Yen) (Yen) 110.61 49.45 ― ― Nine months ended December 31, 2021 Nine months ended December 31, 2020 (Note) As of the end of the previous fiscal year, the Company finalized the provisional accounting treatment for business combinations, and the figures for the nine months ended December 31, 2020 reflect the details of the finalization of the provisional accounting treatment. (Reference) EBITDA (Operating income + Depreciation + Amortization of goodwill) Nine months ended December 31, 2021: Nine months ended December 31, 2020: ¥20,987 million [ 12.1 %] ¥18,719 million [ (18.7) %] Net income before amortization of goodwill (Net income attributable to owners of parent + Amortization of goodwill) Nine months ended December 31, 2021: Nine months ended December 31, 2020: ¥10,402 million [ 61.3 %] ¥6,451 million [ (36.1) %] 1 (2) Consolidated Financial Position As of December 31, 2021 As of March 31, 2021 (Reference) Ownership equity 2. Dividends (Record date) Year ended March 31, 2021 Year ending March 31, 2022 Year ending March 31, 2022 (forecast) (TRANSLATION FOR REFERENCE ONLY) GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 Total assets Net assets Ownership equity ratio Net assets per share (Millions of yen) (Millions of yen) (%) (Yen) 347,338 330,608 200,869 196,332 57.0 58.4 3,274.06 3,195.82 As of December 31, 2021: ¥197,980 million As of March 31, 2021: ¥193,200 million First quarter-end Second quarter-end Third quarter-end Year-end Annual Dividends per share (Yen) ― ― (Yen) 30.00 34.00 (Yen) ― ― (Yen) 36.00 (Yen) 66.00 34.00 68.00 (Note) Revisions to the latest dividend forecast: None 3. Consolidated Financial Forecast for the Year Ending March 31, 2022 (from April 1, 2021 to March 31, 2022) (The percentages show the changes from the corresponding period of the previous year.) Net sales Operating income Ordinary income Full year (Millions of yen) 225,000 (%) (Millions of yen) (%) (Millions of yen) 3.5 10,000 (29.6) 10,000 (29.3) 7,000 22.7 115.77 Net income attributable to owners of parent (%) (Millions of yen) (%) Net income per share (Yen) (Note) Revisions to the latest consolidated financial forecast: Yes (Reference) EBITDA Year ending March 31, 2022: ¥26,600 million Net income before amortization of goodwill Year ending March 31, 2022: ¥12,300 million 2 (TRANSLATION FOR REFERENCE ONLY) GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 Notes: (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries involving a change in the scope of consolidation): Yes Newly included: 1 company (Company name: Revolution Retail Systems, LLC) Excluded: – (Note) For more information, please refer to “2. Quarterly Consolidated Financial Statements and Significant Notes Thereto (3) Notes to Quarterly Consolidated Financial Statements, Changes in Significant Subsidiaries During the Period” on page 11 of the Attachment. (2) Application of accounting methods specific to preparation of the quarterly consolidated financial statements: (3) Changes in accounting policies and estimates, and restatements Yes (a) Changes in accounting policies associated with revisions of accounting standards, etc.: (b) Changes in accounting policies other than (a): (c) Changes in accounting estimates: (d) Restatements: Yes None None None (Note) For more information, please refer to “2. Quarterly Consolidated Financial Statements and Significant Notes Thereto (3) Notes to Quarterly Consolidated Financial Statements, Changes in Accounting Policies” on page 11 of the Attachment. (4) Total number of shares issued (common shares) (a) Total number of shares issued at the end of the period (including treasury shares) (b) Number of treasury shares at the end of the period As of December 31, 2021: As of March 31, 2021: As of December 31, 2021: As of March 31, 2021: 63,638,210 shares 63,638,210 shares 2,866,078 shares 2,866,078 shares (c) Average number of shares (cumulative from the beginning of the period) Nine months ended December 31, 2021: 60,466,015 shares Nine months ended December 31, 2020: 60,447,366 shares (Note) In addition to the number of treasury shares at the end of the period, there also existed Company shares owned by the “Board Incentive Plan (BIP) Trust Account” and “Employee Stock Ownership Plan (ESOP) Trust Account.” (As of December 31, 2021: 302,721 shares, As of March 31, 2021: 317,905 shares) (Note) Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation. (Note) Explanation regarding the appropriate use of financial forecasts and other special items (Caution concerning forward-looking statements) The forward-looking statements such as operational forecasts contained in this report are based on the information currently available to the Company and certain assumptions which the Company regards as legitimate, and are not promises regarding the achievement of forecasts. Actual performance may differ greatly from these forecasts due to various present and future factors. For the assumptions and other related matters concerning the financial forecasts, please refer to “1. Qualitative Information on the Financial Statements, (2) Consolidated Financial Forecasts and Other Forward-looking Statements” on page 6 of the Attachment. 3 (TRANSLATION FOR REFERENCE ONLY) GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 1. Qualitative Information on the Financial Statements …………………………………………………………………………………. (1) Operating Results ………………………………………………………………………………………………………………………………………………………. (2) Consolidated Financial Forecasts and Other Forward-looking Statements ………………………………………………………………………….. 2. Quarterly Consolidated Financial Statements and Significant Notes Thereto ……………………………………………… (1) Quarterly Consolidated Balance Sheet ………………………………………………………………………………………………………………………….. (2) Quarterly Consolidated Statements of Income and Comprehensive Income ……………………………………………………………………….. Quarterly Consolidated Statement of Income …………………………………………………………………………………………………………………. Quarterly Consolidated Statement of Comprehensive Income ………………………………………………………………………………………….. (3) Notes to Quarterly Consolidated Financial Statements…………………………………………………………………………………………………….. Notes Regarding Assumption of a Going Concern ………………………………………………………………………………………………………….. Changes in Significant Subsidiaries During the Period ……………………………………………………………………………………………………. Application of Accounting Methods Specific to Preparation of the Quarterly Consolidated Financial Statements …………………… Changes in Accounting Policies …………………………………………………………………………………………………………………………………… Segment Information ………………………………………………………………………………………………………………………………………………….. 5 5 6 7 7 9 9 10 11 11 11 11 11 12 Attachment Contents 4 (TRANSLATION FOR REFERENCE ONLY) 1. Qualitative Information on the Financial Statements (1) Operating Results GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 In the nine months ended December 31, 2021, the global economy remained on a recovery trend with the progress of vaccinations in many countries. Economic recovery slowed down in some regions, however, due to the resurgence of COVID-19, shortages of parts such as semiconductors, and soaring parts prices. Specifically, the economy showed signs of recovery in the U.S. and Europe, owing to the initiatives to normalize economic activity. In Asia, challenging conditions persisted under the impact of the pandemic, such as delays in vaccinations. In China, personal consumption and industrial production fell and economic recovery slowed down due to strict restrictions on activities and other government regulations. The Japanese economy saw a moderate recovery as capital investment and corporate earnings showed signs of improvement. As the spread of infection slowed following the latest resurgence of COVID-19, downward pressure eased in the food service and hotel industries, whose business foundations are face-to-face services. Under such circumstances, sales to financial institutions and the retail industry were both strong in the overseas market. In particular, sales increased for sales proceeds deposit machines used for back-office operations and for self-service coin and banknote recyclers for cashiers used in the retail industry. This is largely attributable to a growing need for contact-free and self-service solutions to prevent COVID-19 infection, and a need for rigorous cash management. Sales also exceeded the pre-COVID level for the Acrelec Group S.A.S., which is engaged in self-service kiosks related business. Another remark was the acquisition of Revolution Retail Systems, LLC headquartered in the U.S. in December 2021. This was for the purpose of expanding sales of sales proceeds deposit machines for back-office operations in the U.S. retail industry. In the domestic business, while the large-scale demand for the financial market in the previous year has run its course, sales increased in the retail and transportation market, supported by the sales of products such as self-service coin and banknote recyclers for cashiers, in response to labor shortages and the need for contact-free and self-service solutions. As a result, net sales in this nine-month period totaled ¥158,709 million (up 8.7% year on year). Of this, sales of merchandise and finished goods were ¥98,863 million (up 11.6% year on year) and sales from maintenance services were ¥59,846 million (up 4.2% year on year). Operating income was ¥8,639 million (up 16.7% year on year), and ordinary income was ¥8,864 million (up 22.1% year on year). Net income attributable to owners of parent was ¥6,688 million (up 123.8% year on year) as a result of the addition of extraordinary income from the transfer of shares of viafintech GmbH, and the subtraction of extraordinary losses recorded due to an incident occurred at the Company’s domestic consolidated subsidiary. Both net sales and income increased year on year for the nine months ended December 31, 2021, however, global shortage of parts such as semiconductors is expected to continue and have an impact on our business. This includes delays in production and sales, and higher costs due to soaring parts prices. Results of operations in each business segment are as follows. Financial market Sales of this segment’s main product, open teller systems, were slow, and sales of coin and banknote recyclers for tellers were also sluggish due to the large-scale demand in the previous year having run its course. In addition, sales from maintenance services decreased due to a slowdown in the system modifications required in connection with the scheduled issuance of the new 500-yen coin. As a result, net sales in this segment were ¥25,836 million (down 21.5% year on year) and operating income was ¥4,626 million (down 20.0% year on year). Retail and transportation market Sales of this segment’s main product, coin and banknote recyclers for cashiers, were favorable, and sales of ticket vending machines and multifunctional banknote changers were both robust. In addition, sales from maintenance services increased owing to the system modifications required in connection with the scheduled issuance of the new 500-yen coin. As a result, net sales in this segment were ¥35,964 million (up 8.5% year on year) and operating income was ¥2,723 million (up 77.2% year on year). Amusement market The full-scale recovery of demand was not seen in this segment. However, sales increased for the main products, such as card systems and pachinko prize dispensing machines used in pachinko parlors, compared with the corresponding period of the previous year, where there was downward pressure from temporary store closures and short operating hours. As a result, net sales in this segment were ¥9,428 million (up 20.7% year on year) and operating loss was ¥114 million (vs. operating loss of ¥159 million in the corresponding period of the previous year). 5 (TRANSLATION FOR REFERENCE ONLY) GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 Overseas market In the Americas and Europe, sales were robust for RBG-series banknote recyclers for financial institutions and CI-series sales proceeds deposit machines for the retail industry. In Asia, sales of UW-series banknote sorters were sluggish. Furthermore, sales from Acrelec Group S.A.S. and its subsidiaries totaled ¥13,586 million. As a result, net sales in this segment were ¥85,771 million (up 21.8% year on year) and operating income was ¥2,590 million (up 243.0% year on year). In the “Other” business segment, net sales were ¥1,707 million (up 3.2% year on year) and operating loss was ¥1,186 million (vs. operating loss of ¥511 million in the corresponding period of the previous year). Please refer to the “Notice Regarding the Disclosure of the Results of the Investigations by the Internal Investigation Committee” for the details of the previously mentioned incident by an employee, who was dismissed on disciplinary grounds as of March 11, 2022, of the Company’s domestic consolidated subsidiary (the “Incident”). For the impact of the Incident on the Company’s consolidated performance, please refer to the “Notice Regarding the Amendments of Past Financial Results and the Announcement of Financial Results (Third Quarter of Fiscal Year Ending March 31, 2022)”. The Company sincerely apologize to all our stakeholders for any inconvenience this may have caused. (2) Consolidated Financial Forecasts and Other Forward-looking Statements Regarding the full-year financial forecasts for the fiscal year ending March 31, 2022, the demand for our products and services remains steady both in Japan and overseas. However, delays in sales resulting from the impact on production from difficulties in procuring parts, such as semiconductors, and higher costs due to soaring parts prices are expected to continue. Therefore, the forecast remains unchanged for net sales and operating income as disclosed on November 5, 2021. In addition, ordinary income has been revised upward by ¥500 million from the announced figures, while net income attributable to owners of parent has been revised downward by ¥500 million from the announced figures. This was due to the recording of extraordinary losses associated with the Incident. The exchange rates used in the financial forecasts for the fiscal year ending March 31, 2022 have been changed to US$1=¥110 (¥105 before change) and 1 euro=¥130 (¥125 before change) from the rates assumed in May 2021. 6 (TRANSLATION FOR REFERENCE ONLY) 2. Quarterly Consolidated Financial Statements and Significant Notes Thereto (1) Quarterly Consolidated Balance Sheet GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Millions of yen) As of March 31, 2021 As of December 31, 2021 Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes and accounts receivable – trade, and contract assets Electronically recorded monetary claims – operating Securities Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Intangible assets Customer relationships Goodwill Other Total intangible assets Investments and other assets Investment securities Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Current portion of long-term borrowings Income taxes payable Provision for bonuses Provision for bonuses for directors (and other officers) Provision for stock grant Other Total current liabilities Non-current liabilities Bonds payable Long-term borrowings Provision for stock grant Retirement benefit liability Other Total non-current liabilities Total liabilities 66,188 55,660 – 684 50 33,176 6,943 12,397 5,710 (1,032) 179,778 39,183 22,473 49,800 8,369 80,642 11,228 20,726 (951) 31,003 150,829 330,608 10,543 6,529 15,656 3,130 2,480 7,553 91 – 41,811 87,796 20,000 3,939 245 2,590 19,703 46,478 134,275 7 53,001 – 47,428 793 50 38,497 13,342 17,066 11,182 (1,108) 180,252 38,436 20,564 63,817 8,908 93,290 14,535 22,944 (2,121) 35,359 167,085 347,338 14,385 7,427 27,581 1,428 1,680 4,311 81 139 46,805 103,842 20,000 – 232 2,763 19,629 42,626 146,468 (TRANSLATION FOR REFERENCE ONLY) 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 Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Millions of yen) As of March 31, 2021 As of December 31, 2021 12,892 12,294 164,411 (9,241) 180,357 680 9,054 3,109 12,843 3,131 196,332 330,608 12,892 12,294 166,844 (9,196) 182,835 488 11,919 2,737 15,144 2,889 200,869 347,338 8 (TRANSLATION FOR REFERENCE ONLY) (2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statement of Income GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Millions of yen) Nine months ended December 31, 2020 (From April 1, 2020 to December 31, 2020) Nine months ended December 31, 2021 (From April 1, 2021 to December 31, 2021) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Non-operating income Interest income Dividend income Foreign exchange gains Share of profit of entities accounted for using equity method Other Total non-operating income Non-operating expenses Interest expenses Foreign exchange losses Share of loss of entities accounted for using equity method Other Total non-operating expenses Ordinary income Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Gain on sale of shares of subsidiaries and associates Total extraordinary income Extraordinary losses Loss on retirement of non-current assets Loss on valuation of investment securities Provision for allowance for doubtful accounts Other Total extraordinary losses Income before income taxes Income taxes Net income Net income attributable to non-controlling interests Net income attributable to owners of parent 145,966 87,703 58,263 50,862 7,400 163 143 – – 810 1,117 420 514 203 116 1,254 7,263 4 19 – 23 29 54 235 21 340 6,946 3,502 3,444 455 2,989 158,709 92,870 65,839 57,199 8,639 163 140 103 26 397 830 480 – – 124 605 8,864 15 1 4,582 4,598 27 28 1,180 1 1,237 12,225 4,882 7,343 654 6,688 9 (TRANSLATION FOR REFERENCE ONLY) Quarterly Consolidated Statement of Comprehensive Income GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 (Millions of yen) Nine months ended December 31, 2020 (From April 1, 2020 to December 31, 2020) Nine months ended December 31, 2021 (From April 1, 2021 to December 31, 2021) Net income Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Owners of parent Non-controlling interests 3,444 572 (902) 256 4 (68) 3,375 2,923 452 7,343 (188) 2,961 (372) (3) 2,397 9,740 9,025 715 10 (TRANSLATION FOR REFERENCE ONLY) (3) Notes to Quarterly Consolidated Financial Statements Notes Regarding Assumption of a Going Concern Not applicable. Changes in Significant Subsidiaries During the Period GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 From this third quarter, following the acquisition of full ownership of Revolution Retail Systems, LLC, three companies, including the subsidiaries of Revolution Retail Systems, LLC, are included in the scope of consolidation. Revolution Retail Systems, LLC qualifies as a specified subsidiary of the Company. Application of Accounting Methods Specific to Preparation of the Quarterly Consolidated Financial Statements Tax expense is calculated by rationally estimating the effective tax rate after application of tax-effect accounting to income before income taxes for the fiscal year including this third quarter, and then multiplying the income before income taxes for the period by the estimated effective tax rate. Changes in Accounting Policies (Application of Accounting Standard for Revenue Recognition, etc.) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the first quarter ended June 30, 2021, and it has recognized revenue at the time the control of promised goods or services is transferred to the customer at the amount expected to be received upon exchange of said goods or services. The application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations is subject to the transitional treatment provided for in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of the retrospective application, assuming the new accounting policy had been applied to periods prior to the beginning of the first quarter ended June 30, 2021, was added to or deducted from the opening balance of retained earnings of the first quarter ended June 30, 2021, and thus the new accounting policy was applied from such opening balance; provided, however, that the new accounting policy was not retrospectively applied to contracts for which nearly all the revenue amounts had been recognized according to the previous treatment in periods prior to the beginning of the first quarter ended June 30, 2021, by applying the method provided for in paragraph 86 of the Accounting Standard for Revenue Recognition. Furthermore, by applying the method set forth in item (1) of the supplementary provisions of paragraph 86 of the Accounting Standard for Revenue Recognition, modifications to contracts carried out prior to the beginning of the first quarter ended June 30, 2021 were accounted for based on the contractual terms after all contract modifications were reflected. Consequently, this cumulative effect was added to or deducted from the opening balance of retained earnings of the first quarter ended June 30, 2021. The impact of these changes on the opening balance of retained earnings and profit and loss in the nine months ended December 31, 2021 is insignificant. Due to the application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations, “Notes and accounts receivable – trade” under current assets of the consolidated balance sheet as of the end of the previous fiscal year has been included in “Notes and accounts receivable – trade, and contract assets” under current assets from the quarterly consolidated balance sheet as of June 30, 2021. In accordance with the transitional treatment provided for in paragraph 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been restated in accordance with the new approach to presentation. Furthermore, the information on disaggregation of revenue from contracts with customers during the nine months ended December 31, 2020 has not been disclosed as allowed by the transitional treatment provided for in paragraph 28-15 of the Accounting Standard for Quarterly Financial Reporting (ASBJ Statement No. 12, March 31, 2020). (Application of Accounting Standard for Fair Value Measurement, etc.) The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and relevant ASBJ regulations from the beginning of the first quarter ended June 30, 2021. Furthermore, in accordance with the transitional treatment prescribed in paragraph 19 of the Accounting Standard for Fair Value Measurement and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the Company will prospectively apply the new accounting policy prescribed by the Accounting Standard for Fair Value Measurement and relevant ASBJ regulations. The impact of this on the quarterly consolidated financial statements is insignificant. 11 (TRANSLATION FOR REFERENCE ONLY) Segment Information (a) Nine months ended December 31, 2020 (from April 1, 2020 to December 31, 2020) Information on sales, profit (loss) by reportable segment GLORY LTD. (6457) Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022 Reportable segments Financial market Retail and transportation market Amusement market Overseas market Total Other (Note: 1) Total Reconcilia- tion Net sales (1) Sales to customers (2) Intersegment sales or transfers 32,907 – 33,142 – 7,811 – 70,449 144,311 1,655 145,966 – – – – Total 7,811 (159) Notes: 1. “Other” segment is merchandise and finished goods that is not included in the above reportable segments. Segment profit (loss) 145,966 7,400 144,311 7,912 70,449 755 33,142 1,537 32,907 5,779 1,655 (511) 2. Segment profit (loss) corresponds to operating income of quarterly consolidated statement of income. 3. As of the end of the previous fiscal year, the Company finalized the provisional accounting treatment for business combinations, and segment profit (loss) reflects the details of the finalization of the provisional accounting treatment. (b) Nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021) 1. Information on sales, profit (loss) by reportable segment Reportable segments Financial market Retail and transportation market Amusement market Overseas market Total Other (Note: 1) Total Reconcilia- tion Net sales (1) Sales to customers (2) Intersegment sales or transfers 25,836 – 35,964 – 9,428 – 85,771 157,001 – – 1,707 – 158,709 – Total 9,428 (114) Notes: 1. “Other” segment is merchandise and finished goods that is not included in the above reportable segments. Segment profit (loss) 158,709 8,639 157,001 9,826 1,707 (1,186) 85,771 2,590 35,964 2,723 25,836 4,626 2. Segment profit (loss) corresponds to operating income of quarterly consolidated statement of income. 2. Changes in reportable segments The Company reclassified its business segments in the first quarter of FY2021, and the following changes have been made for the businesses that were previously included in “Other” segment. These changes have been reflected in this report accordingly. – Part of Biometric/Image recognition business and of businesses that contribute to Electronic settlement-related business now included in “Retail and transportation market” – Part of “New businesses” now included in “Overseas market” Due to these changes, the segment information for the nine months ended December 31, 2020 was prepared based on the classification of reportable segments after the changes. (Millions of yen) Amounts reported on the quarterly consolidated statement of income (Note: 2) 145,966 – 145,966 7,400 (Millions of yen) Amounts reported on the quarterly consolidated statement of income (Note: 2) 158,709 – 158,709 8,639 – – – – – – – – 12