あさひ（3333） – [Delayed]Non-consolidated Financial Results for the Fiscal Year Ended February 20, 2022

Disclaimer: This document is an English translation of the original document in Japanese and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original in Japanese, the original shall prevail in all respects. Non-consolidated Financial Results for the Fiscal Year Ended February 20, 2022 [Japanese GAAP] April 4, 2022 Company name: ASAHI CO., LTD. Stock exchange listing: Tokyo Stock Exchange Code number: 3333 URL: https://www.cb-asahi.co.jp/ Representative: Yoshifumi Shimoda, President and Representative Director Contact: Shigeru Mori, Director Phone: +81-6-6923-7900 Scheduled date of general shareholders’ meeting: May 14, 2022 Scheduled date of commencing dividend payments: May 16, 2022 Scheduled date of filing securities report: May 16, 2022 Availability of supplementary explanatory materials on annual financial results: Available Schedule of annual financial results briefing session: Scheduled (for analysts and institutional investors) 1. Non-consolidated Financial Results for the Fiscal Year Ended February 20, 2022 (February 21, 2021 – (Amounts of less than one million yen are rounded down.) February 20, 2022) (1) Non-consolidated Operating Results Net sales Fiscal year ended February 20, 2022 February 20, 2021 (% indicates changes from the previous corresponding period.) Operating profit Ordinary profit Profit Million yen 71,398 69,456 % Million yen 5,221 6,863 2.8 16.0 % Million yen 5,512 7,326 (23.9) 71.3 % Million yen 3,541 4,717 (24.8) 72.5 % (24.9) 84.4 Basic earnings per share Diluted earnings per share Return on equity Ratio of ordinary income to total assets Ratio of operating profit to net sales Fiscal year ended February 20, 2022 February 20, 2021 (Reference) Equity in earnings of affiliated companies: Yen 135.68 180.91 Yen – – % 10.4 15.5 % 12.0 17.6 % 7.3 9.9 Fiscal year ended February 20, 2022: ¥ – million Fiscal year ended February 20, 2021: ¥ – million (2) Non-consolidated Financial Position Total assets As of February 20, 2022 As of February 20, 2021 (Reference) Equity: As of February 20, 2022: ¥35,346 million As of February 20, 2021: ¥32,496 million Million yen 46,473 45,287 Million yen 35,346 32,496 (3) Non-consolidated Cash Flows Net assets Equity ratio Net assets per share Yen 1,353.52 1,246.10 % 76.1 71.8 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Fiscal year ended February 20, 2022 February 20, 2021 Million yen 1,585 7,295 Million yen (2,414) (1,870) Million yen (733) (660) Cash and cash equivalents at year-end Million yen 6,135 7,697 2. Dividends Fiscal year ended February 20, 2021 Fiscal year ended February 20, 2022 Fiscal year ending February 20, 2023 (Forecast) Annual dividends 1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total Total dividends (annual) Payout ratio (non-consolidated) Yen Million yen % Yen – – – Yen 0.00 0.00 0.00 Yen – – – Yen 28.0 28.0 28.0 28.0 28.0 28.0 734 734 15.5 20.6 19.6 Ratio of dividends to net assets (non-consolidated) % 2.3 2.1 3. Non-consolidated Financial Results Forecast for the Fiscal Year Ending February 20, 2023 (February 21, 2022 – February 20, 2023) Net sales Operating profit (% indicates changes from the previous corresponding period.) Basic earnings per share Ordinary profit Profit First fiscal half Full year Million yen 45,000 12.3 9.2 78,000 % Million yen 5,600 5,600 % Million yen 5,650 5,700 12.4 7.3 % Million yen 3,700 3,700 9.9 3.4 % 6.7 4.5 Yen 141.75 141.75 * Notes: (1) Changes in accounting policies, changes in accounting estimates and retrospective restatement 1) Changes in accounting policies due to the revision of accounting standards: None 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting estimates: None 4) Retrospective restatement: None (2) Total number of issued shares (common shares) 1) Total number of issued shares at the end of the year (including treasury shares): February 20, 2022: February 20, 2021: February 20, 2022: February 20, 2021: 2) Total number of treasury shares at the end of the year: 26,240,800 shares 26,240,800 shares 126,456 shares 161,976 shares 3) Average number of shares outstanding during the year: Year ended February 20, 2022: Year ended February 20, 2021: 26,103,153 shares 26,078,857 shares (Note) The Company has adopted the Executive Remuneration BIP Trust since June 19, 2014. The number of treasury shares at the end of the year includes the Company’s shares held by the trust (126,070 shares as of February 20, 2022 and 161,590 shares as of February 20, 2021). In addition, the Company’s shares held by the trust are included in the treasury shares to be deducted in the calculation of the average number of shares outstanding during the year (137,261 shares as of February 20, 2022, and 161,590 shares as of February 20, 2021). * These non-consolidated financial results are outside the scope of audit by certified public accountants or an audit firm. * Explanation of the proper use of financial results forecast and other notes (Cautions regarding forward-looking statements, etc.) The financial results forecast and other forward-looking statements contained in this document are based on information currently available to the Company and certain assumptions that are deemed reasonable, and do not constitute a promise that the Company will achieve them. Actual results may differ materially from these statements due to various factors. For the assumptions on which the financial results forecast is based, cautions on the use of the forecast, and other information, please refer to 1. Overview of Operating Results, etc., (4) Future Outlook on page 4 of Attachment. (Access to supplementary explanatory materials on annual financial results and details of annual financial results briefing session) The Company plans to hold an annual financial results briefing session for institutional investors and analysts on Tuesday, April 5, 2022. The explanatory materials on financial results to be used on the day are disclosed on TDnet today and are also available on the Company’s website. Table of Contents – Attachment 1. Overview of Operating Results, etc. ………………………………………………………………………………………. 2 (1) Overview of Operating Results for the Fiscal Year under Review ………………………………………….. 2 (2) Overview of Financial Position for the Fiscal Year under Review …………………………………………. 3 (3) Overview of Cash Flows for the Fiscal Year under Review …………………………………………………… 3 (4) Future Outlook ……………………………………………………………………………………………………………….. 4 (5) Basic Policy on the Distribution of Profit and the Dividend Payout for the Current and Next Fiscal Years ………………………………………………………………………………………………………………………………….. 5 2. Basic Policy on Selection of Accounting Standards …………………………………………………………………. 5 3. Non-consolidated Financial Statements and Principal Notes …………………………………………………….. 6 (1) Non-consolidated Balance Sheets ……………………………………………………………………………………… 6 (2) Non-consolidated Statements of Income …………………………………………………………………………….. 9 (3) Non-consolidated Statements of Changes in Equity …………………………………………………………… 10 (4) Non-consolidated Statements of Cash Flows …………………………………………………………………….. 12 (5) Notes to the Non-consolidated Financial Statements ………………………………………………………… 13 (Notes on going concern assumption) ………………………………………………………………………….. 13 (Changes in presentation) …………………………………………………………………………………………… 13 (Equity in earnings (losses) of affiliates if equity method is applied) ……………………………….. 13 (Segment information, etc.) ………………………………………………………………………………………… 13 (Per share information) ………………………………………………………………………………………………. 14 (Significant subsequent events) …………………………………………………………………………………… 15 4. Others ……………………………………………………………………………………………………………………………….. 16 (1) Results of Purchases ………………………………………………………………………………………………………… 16 (2) Results of Sales ………………………………………………………………………………………………………………. 16 (3) Changes in Officers …………………………………………………………………………………………………………. 16 -1- 1. Overview of Operating Results, etc. (1) Overview of Operating Results for the Fiscal Year under Review The Japanese economy in the fiscal year under review remained uncertain due to the prolonged impact of COVID-19. Under the circumstances, the necessity of bicycles has become more widely recognized because of increased opportunities to use bicycles as a means of transportation that avoids close contact with other people in confined spaces in daily life, particularly for commuting to work or school, and growing health consciousness leading to more people riding bicycles to alleviate a lack of exercise. As a result of increased replacement demand for electric assist bicycles, although there was a gradual decrease in the number of units sold in the bicycle market, sales in value terms remained at the same high level as in the previous fiscal year. With the safety and security of customers and employees as its top priority, the Company implemented COVID-19 transmission prevention measures and, with each person holding a sense of mission that we are a business that supports the infrastructure of daily life in society, the entire company has united as one in its efforts to continue its operation to meet the expectations of customers. In the area of sales, we focused our efforts on securing merchandise for electric assist bicycles, which have become popular with a wide range of generations due to functional advances and expansion of models in recent years. We grew sales particularly from our “Internet Orders with Store Pick-Up” service, resulting in net sales higher than the previous fiscal year. On the other hand, in the sports cycle area, despite a global increase in demand, supply shortages and production shutdowns at parts manufacturers manifested a supply-demand tightness, and it remained difficult to secure a wide range of popular models. In selling, general and administrative expenses, various expenses were kept down in the previous fiscal year due to an inability to secure sufficient staff with the sharp rise in demand that accompanied the pandemic, as well as the voluntary restraint in corporate activities such as the voluntary temporary closure of stores. In the fiscal year under review, however, to return the situation to normal, we implemented planned staff reinforcements and miscellaneous expenditure also returned to the level of previous years. As a result, selling, general and administrative expenses were slightly higher than the previous fiscal year. In line with the new medium-term management plan ASAHI VISION 2025, which was launched in the fiscal year ended February 20, 2022, the Company strengthened the three areas of “Attraction of Staff,” “Attraction of Merchandise,” and “Attraction of Stores” which comprise its Culture Model. We also concentrated our efforts on building three growth foundations in the areas of “digital and IT platforms,” “supply chain management,” and “brand management,” with an eye on the realization and extension of our four key strategies, namely “enhancement of customer relations (CRM),” “activation of existing stores,” “development of a new store format,” and “expansion of our business domain.” As a specific initiative, in response to the large increase in customers on the Cycle Base Asahi app, the Company enhanced its dissemination of information, including coupons, events, and post-purchase bicycle maintenance, as a way of further deepening its relationship with customers. We also commenced rebuilding of systems infrastructure. In addition to the development of existing logistics facilities, the Company started rebuilding its basic logistics concept into the future. With these and other efforts, we have made a smooth start to the new plan toward our goals of enhancing corporate value and achieving sustainable growth. In store-opening strategy, the Company promoted the development of urban-type stores as well as its conventional suburban-type stores. Although these urban-type stores have a smaller sales floor area, the Company made progress in establishing a new store format that will become “cycle bases” for urban areas. These stores will act as bases for internet orders with store pick-up service and be able to display selected merchandise to suit local demand, while offering the same level of service as conventional-format stores by providing quick maintenance and repairs. Regarding store opening and closures, the Company opened eight new stores in the Kanto region, five in the Kinki region, two in the Chugoku region, and one in the Kyushu region. The Kanto region lost two stores with one store being amalgamated into another and one store closed. As a result, the total number of stores at the -2- end of the year ended February 20, 2022 was 505, consisting of 486 directly operated stores and 19 franchise stores. (Overview of Business Performance in the 47th Business Term) As a result of the above activities, the Company achieved an increase in net sales, although profit decreased, for the fiscal year under review, as shown below. Net sales ¥71,398,999 thousand (up 2.8% year-on-year) Ordinary profit ¥5,512,897 thousand (down 24.8% year-on-year) Profit ¥3,541,677 thousand (down 24.9% year-on-year) Segment information is omitted as the Company has only one segment. (2) Overview of Financial Position for the Fiscal Year under Review (Assets) The balance of total assets at the end of the fiscal year under review was ¥46,473,316 thousand, an increase of ¥1,186,027 thousand from the end of the previous fiscal year. The balance of current assets at the end of the fiscal year under review was ¥24,946,534 thousand, an increase of ¥280,709 thousand from the end of the previous fiscal year. This was due mainly to increases in merchandise of ¥1,606,403 thousand and goods in transit of ¥275,481 thousand, despite a decrease in cash and deposits of ¥1,630,660 thousand. The balance of non-current assets at the end of the fiscal year under review was ¥21,526,782 thousand, an increase of ¥905,317 thousand from the end of the previous fiscal year. This was due mainly to increases in buildings, net of ¥506,020 thousand, structures, net of ¥130,456 thousand, tools, furniture and fixtures, net of ¥156,263 thousand, and deferred tax assets of ¥79,716 thousand. (Liabilities) The balance of liabilities at the end of the fiscal year under review was ¥11,127,065 thousand, a decrease of ¥1,663,497 thousand from the end of the previous fiscal year. The balance of current liabilities at the end of the fiscal year under review was ¥10,071,519 thousand, a decrease of ¥1,611,869 thousand from the end of the previous fiscal year. This was due mainly to decreases in income taxes payable of ¥1,257,807 thousand and accrued consumption taxes of ¥843,476 thousand, despite increases in accounts payable – trade of ¥313,322 thousand and accrued expenses of ¥91,930 thousand. The balance of non-current liabilities at the end of the fiscal year under review was ¥1,055,545 thousand, a decrease of ¥51,628 thousand from the end of the previous fiscal year. This was due mainly to decreases in provision for share-based compensation of ¥26,000 thousand, guarantee deposits received of ¥12,655 thousand, and long-term accounts payable – other of ¥42,582 thousand, despite an increase in asset retirement obligations of ¥60,198 thousand. (Net assets) The balance of net assets at the end of the fiscal year under review was ¥35,346,251 thousand, an increase of ¥2,849,524 thousand from the end of the previous fiscal year. This was due mainly to an increase in profit of ¥3,541,677 thousand and a decrease in dividends of surplus of ¥734,731 thousand. (3) Overview of Cash Flows for the Fiscal Year under Review Cash and cash equivalents (hereinafter referred to as “net cash”) at the end of the fiscal year under review decreased by ¥1,562,471 thousand to ¥6,135,378 thousand compared to the end of the previous fiscal year. The -3- details for cash flows in each area of activity are as follows: (Cash Flows from Operating Activities) Net cash provided by operating activities was ¥1,585,662 thousand. The principal cash inflow factors included profit before income taxes of ¥5,368,504 thousand and depreciation of ¥1,352,575 thousand. The principal cash outflow factors included an increase in inventories of ¥1,978,104 thousand and income taxes paid of ¥3,131,518 thousand. (Cash Flows from Investing Activities) Net cash used in investing activities was ¥2,414,315 thousand. The principal cash outflow factors included purchase of property, plant and equipment of ¥1,933,004 thousand for new store openings and payments of guarantee deposits of ¥282,738 thousand. (Cash Flows from Financing Activities) Net cash used in financing activities was ¥733,818 thousand. The principal cash outflow factor was dividends paid. (Reference) Trends of Cash Flow Indicators Fiscal year ended February 20 2018 2019 2020 2021 2022 Equity ratio Equity ratio at fair value Ratio of interest-bearing debt to cash flow 66.5 95.3 1.0 71.1 107.3 0.4 74.4 86.9 0.0 71.8 87.7 0.0 Interest coverage ratio 1,059.2 1,252.2 8,277.1 32,045.8 (Notes) 1. Equity ratio: Equity/Total assets Equity ratio at fair value: Market capitalization/Total assets Ratio of interest-bearing debt to cash flow: Interest-bearing debt/Operating cash flow 2. Market capitalization is calculated on the basis of the number of shares issued excluding treasury Interest coverage ratio: Operating cash flow/Interest paid shares. 3. Interest-bearing debt covers all liabilities recorded on the balance sheets that bear interest. Interest payments recorded in the Statements of Cash Flows are used for Interest paid. 4. The cash flows from operating activities recorded in the Statements of Cash Flows are used as 76.1 74.3 0.0 0.0 Operating cash flow. (4) Future Outlook In terms of future outlook, with people’s daily lives in society greatly affected by COVID-19, bicycles are being recognized as indispensable for many people in the new normal, as a means of transportation that avoids close contact with other people in confined spaces. Meanwhile, with the situations in various countries around the world in a constant state of change due to the situation in Ukraine, the future outlook remains unclear. In the bicycle industry, with replacement demand for electric assist bicycles expected to grow, the Company envisages that increases in sales of high-priced merchandise will keep the size of the bicycle market at a high level. However, crude oil prices remain high globally, and purchase prices are increasing, including rising prices -4- of all types of raw materials, rising labor costs in local production plants, and soaring marine transportation costs. In addition, harsh circumstances are predicted in the sports cycle sector, with the continued increase in global demand making it difficult to secure stocks of popular merchandise. In light of such changes in the environment, the Company will continue in its endeavors to be the most trusted partner in customers’ bicycle life, so that customers can enjoy a more comfortable bicycle life. First, in the area of merchandise, the Company will make use of its own large-scale logistics warehouse to secure stocks of popular merchandise, with a focus on electric assist bicycles. We will also place efforts into product development so we may offer merchandise with higher added value. In addition, in response to the increase in purchase prices, we will reduce our expenses as much as possible, including leveraging IT systems to improve operational efficiency and optimizing personnel placements. Further, in the face of some cost increases, we will also exercise caution in the optimization of sales prices while monitoring market trends, under our basic policy of offering products of reliable quality and value. The Company’s store opening strategy includes plans to open 17 new stores. In addition to pursuing store openings that are focused on profitability, we will also concentrate efforts on the development of urban-type stores and will continue to expand our sales network. We will also proceed with the activation of existing stores by rebuilding or refurbishing older-format stores, including expanding their sales floor area. In the area of use of digital and IT platforms, through the Cycle Base Asahi app, the Company will send out optimized information to deliver products and services that meet customers’ needs and to build good relationships with customers. In the enhancement of supply chain management functions, the Company will review the size and systems of its logistics facilities in each region to prepare for an expansion of operations. We will also promote the improvement of accuracy and efficiency of our logistics operations by revamping warehouse management systems, in our aim to improve customer convenience in various sales channels, including the Official Online Store, our website for direct internet-based sales. In light of the above, the Company forecasts net sales of ¥78,000,000 thousand (up 9.2% year-on-year), operating profit of ¥5,600,000 thousand (up 7.3% year-on-year), ordinary profit of ¥5,700,000 thousand (up 3.4% year-on-year), and profit of ¥3,700,000 thousand (up 4.5% year-on-year). (5) Basic Policy on the Distribution of Profit and the Dividend Payout for the Current and Next Fiscal Years The Company believes that the return of profits to shareholders is an important management issue and has adopted a basic policy for continued distribution of dividends. Dividends of surplus are conducted once a year as year-end dividends, and the decision-making body for dividends is the General Meeting of Shareholders. The Company appropriates internal reserves for investments that will contribute to profits, including the establishment of new stores and refurbishment of existing stores, IT, and logistics. At the same time, we will make effective investments for the enhancement and expansion of business activities and for global business development, and strive to strengthen the management foundations and enhance corporate value. In accordance with these policies, the Company wishes to issue year-end dividends of ¥28.00 per share as dividends for the fiscal year ended February 20, 2022. The Company stipulates in its Articles of Incorporation that it is able to pay interim dividends. The decision-making body for interim dividends is the Board of Directors. For the next fiscal year, the Company plans to issue dividends of ¥28.00 per share in accordance with its basic policy for the distribution of profit. 2. Basic Policy on Selection of Accounting Standards Since the Company does not prepare consolidated financial statements, we have prepared our financial statements based on Japanese accounting standards, in consideration of the burden and other aspects of establishing a system for the preparation of financial statements based on International Financial Reporting Standards. -5- 3. Non-consolidated Financial Statements and Principal Notes (1) Non-consolidated Balance Sheets As of February 20, 2021 As of February 20, 2022 Assets Current assets Cash and deposits Accounts receivable – trade Merchandise Goods in transit Supplies Accounts receivable – other Prepaid expenses Forward exchange contracts Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings Accumulated depreciation Buildings, net Structures Accumulated depreciation Structures, net Machinery and equipment Accumulated depreciation Machinery and equipment, net Vehicles Accumulated depreciation Vehicles, net Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Land Construction in progress Total property, plant and equipment Intangible assets Software Other Total intangible assets (Thousand yen) 5,958,649 3,155,879 13,516,721 1,006,429 171,453 246,942 440,014 254,073 197,330 (960) 24,946,534 19,896,175 (11,206,329) 8,689,846 1,110,871 (601,714) 509,157 134,534 (117,732) 16,801 31,476 (27,867) 3,608 1,807,901 (1,246,488) 561,412 3,163,012 86,550 13,030,390 423,227 92,223 515,450 7,589,310 3,170,301 11,910,317 730,947 75,234 311,267 374,283 217,856 287,265 (960) 24,665,824 18,658,496 (10,474,671) 8,183,825 917,510 (538,809) 378,701 134,534 (112,135) 22,399 31,118 (25,244) 5,873 1,519,880 (1,114,731) 405,149 3,089,742 196,596 12,282,288 357,050 113,967 471,018 -6- Investments and other assets Investments in capital Investments in capital of subsidiaries and associates Long-term loans receivable from employees Long-term accounts receivable – other Long-term prepaid expenses Guarantee deposits Construction assistance fund receivables Deferred tax assets Investment property Accumulated depreciation Investment property, net Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets Liabilities Current liabilities Accounts payable – trade Accounts payable – other Accrued expenses Income taxes payable Accrued consumption taxes Advances received Deposits received Unearned revenue Provision for bonuses Provision for shareholder benefit program Reserve for commodity warranties Asset retirement obligations Other Total current liabilities Non-current liabilities Provision for share-based compensation Provision for merchandise warranties Asset retirement obligations Other Total non-current liabilities Total liabilities As of February 20, 2021 As of February 20, 2022 (Thousand yen) 10 91,083 1,131 5,725 511,917 5,105,842 1,078,175 977,393 212,965 (128,397) 84,567 18,036 (5,725) 7,868,157 20,621,464 45,287,289 4,351,718 1,073,715 1,554,370 2,023,685 949,707 478,700 148,313 3,708 878,451 152,730 66,786 – 1,501 11,683,388 148,000 19,801 608,213 331,158 1,107,173 12,790,562 10 91,083 500 4,765 521,578 5,154,383 961,082 1,057,109 247,519 (139,259) 108,260 86,932 (4,765) 7,980,941 21,526,782 46,473,316 4,665,041 982,696 1,646,301 765,877 106,230 567,783 161,089 3,898 930,273 182,926 54,694 2,292 2,414 10,071,519 122,000 13,932 668,412 251,201 1,055,545 11,127,065 -7- Net assets Shareholders’ equity Share capital Capital surplus Legal capital surplus Total capital surplus Retained earnings Legal retained earnings Other retained earnings Reserve for special depreciation General reserve Retained earnings brought forward Total retained earnings Treasury shares Total shareholders’ equity Valuation and translation adjustments Deferred gains or losses on hedges Total valuation and translation adjustments Total net assets Total liabilities and net assets As of February 20, 2021 As of February 20, 2022 (Thousand yen) 2,061,356 2,165,171 2,165,171 18,688 331,777 22,090,000 5,926,536 28,367,001 (230,764) 32,362,765 133,961 133,961 32,496,726 45,287,289 2,061,356 2,165,171 2,165,171 18,688 146,417 24,090,000 6,918,843 31,173,948 (180,112) 35,220,362 125,888 125,888 35,346,251 46,473,316 -8- For the fiscal year ended February 20, 2021 For the fiscal year ended February 20, 2022 (Thousand yen) (2) Non-consolidated Statements of Income Net sales Cost of sales Beginning merchandise inventory Cost of purchased goods Provision of reserve for product warranties Total Transfer to other account Ending merchandise inventory Total cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Rental income from buildings Commission income Compensation income Other Total non-operating income Non-operating expenses Interest expenses Foreign exchange losses Rental costs on real estate Other Total non-operating expenses Ordinary profit Extraordinary losses Loss on sale and retirement of non-current assets Impairment losses Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit 69,456,001 10,905,782 35,556,322 86,587 46,548,691 204,079 11,910,317 34,434,294 35,021,706 28,157,822 6,863,883 49,294 108,066 14,457 300,260 107,916 579,995 214 13,026 88,206 15,806 117,253 7,326,626 14,345 255,794 270,139 7,056,486 2,577,000 (238,340) 2,338,659 4,717,827 71,398,999 11,910,317 37,905,130 68,626 49,884,073 203,806 13,516,721 36,163,546 35,235,453 30,014,033 5,221,419 46,599 115,433 56,415 111,971 91,109 421,529 – 23,498 91,329 15,223 130,051 5,512,897 18,877 125,515 144,393 5,368,504 1,903,000 (76,173) 1,826,826 3,541,677 -9- Balance at beginning of period Changes during period Dividends of surplus Reversal of reserve for special depreciation Profit Provision of general reserve Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at beginning of period Changes during period Dividends of surplus Reversal of reserve for special depreciation Profit Provision of general reserve Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period (3) Non-consolidated Statements of Changes in Equity Fiscal year ended February 20, 2021 (from February 21, 2020 to February 20, 2021) (Thousand yen) Capital surplus Shareholders’ equity Retained earnings Other retained earnings Share capital Legal capital surplus Total capital surplus Legal retained earnings Reserve for special depreciation General reserve Retained earnings brought forward Total retained earnings 2,061,356 2,165,171 2,165,171 18,688 517,418 20,090,000 3,495,395 24,121,502 4,717,827 4,717,827 2,000,000 (2,000,000) (472,328) (472,328) (185,641) 185,641 – – – – – – (185,641) 2,000,000 2,431,141 4,245,499 2,061,356 2,165,171 2,165,171 18,688 331,777 22,090,000 5,926,536 28,367,001 ) – – -10- Shareholders’ equity Valuation and translation adjustments Treasury shares Total shareholders’ equity Deferred gains or losses on hedges Total valuation and translation adjustments Total net assets (230,703) 28,117,326 102,895 102,895 28,220,222 (472,328) (472,328) – – 4,717,827 4,717,827 (60) (60) (60) 31,066 31,066 31,066 (60) 4,245,438 31,066 31,066 4,276,504 (230,764) 32,362,765 133,961 133,961 32,496,726 Balance at beginning of period Changes during period Dividends of surplus Reversal of reserve for special depreciation Profit Provision of general reserve Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at beginning of period Changes during period Dividends of surplus Reversal of reserve for special depreciation Profit Provision of general reserve Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Fiscal year ended February 20, 2022 (from February 21, 2021 to February 20, 2022) (Thousand yen) Capital surplus Shareholders’ equity Retained earnings Other retained earnings Share capital Legal capital surplus Total capital surplus Legal retained earnings Reserve for special depreciation General reserve Retained earnings brought forward Total retained earnings 2,061,356 2,165,171 2,165,171 18,688 331,777 22,090,000 5,926,536 28,367,001 ) 3,541,677 3,541,677 (185,360) 185,360 2,000,000 (2,000,000) (734,731) (734,731) – – – – – – (185,360) 2,000,000 992,306 2,806,946 2,061,356 2,165,171 2,165,171 18,688 146,417 24,090,000 6,918,843 31,173,948 – – -11- Shareholders’ equity Valuation and translation adjustments Treasury shares Total shareholders’ equity Deferred gains or losses on hedges Total valuation and translation adjustments Total net assets (230,764) 32,362,765 133,961 133,961 32,496,726 (734,731) (734,731) – – 3,541,677 3,541,677 50,651 50,651 50,651 (8,073) (8,073) (8,073) 50,651 2,857,597 (8,073) (8,073) 2,849,524 (180,112) 35,220,362 125,888 125,888 35,346,251 (4) Non-consolidated Statements of Cash Flows For the fiscal year ended February 20, 2021 For the fiscal year ended February 20, 2022 (Thousand yen) Cash flows from operating activities Profit before income taxes Depreciation Impairment losses Amortization of long-term prepaid expenses The amount of rent offset of construction assistance fund receivables Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for shareholder benefit Increase (decrease) in provision for goods warranties Increase (decrease) in provision for share-based program compensation Interest and dividend income Interest expenses Compensation income Loss (gain) on sale and retirement of non-current assets Decrease (increase) in trade receivables Decrease (increase) in inventories Decrease (increase) in accounts receivable – other Increase (decrease) in trade payables Increase (decrease) in accrued consumption taxes Increase (decrease) in accounts payable – other Increase (decrease) in accrued expenses Other, net Subtotal Interest and dividends received Interest paid Proceeds from compensation Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of intangible assets Loan advances Proceeds from collection of loans receivable Purchase of long-term prepaid expenses Payments for asset retirement obligations Payments of guarantee deposits Proceeds from refund of guarantee deposits Net cash provided by (used in) investing activities Cash flows from financing activities Repayments of long-term borrowings Purchase of treasury shares Dividends paid Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period -12- 7,056,486 1,260,487 255,794 17,225 326,570 (960) 67,996 35,278 (10,016) 24,000 (49,294) 214 (300,260) 14,345 (687,930) (1,239,384) (86,391) 719,370 627,077 233,072 152,322 108,726 8,524,732 83 (227) 281,458 (1,510,778) 7,295,268 (1,348,513) (202,999) (1,070) 2,799 (12,500) (3,300) (346,419) 41,381 (1,870,621) (187,500) (60) (472,636) (660,196) 4,764,449 2,933,400 7,697,850 5,368,504 1,352,575 125,515 17,068 326,819 (960) 51,822 30,196 (17,961) 22,000 (46,599) – (111,971) 18,877 14,421 (1,978,104) 49,204 313,322 (843,476) (179,617) 91,930 (21,393) 4,582,175 68 – 134,937 (3,131,518) 1,585,662 (1,933,004) (193,210) (1,400) 1,775 (97,572) (381) (282,738) 92,217 (2,414,315) – – (733,818) (733,818) (1,562,471) 7,697,850 6,135,378 (5) Notes to the Non-consolidated Financial Statements (Notes on going concern assumption) Not applicable. (Changes in presentation) (Non-consolidated Statements of Income) As “Commission income,” which was included in “Other” under “Non-operating income” in the previous fiscal year, exceeded 10% of total non-operating income, it has been presented separately from the fiscal year under review. To reflect this change in presentation, the financial statements for the previous fiscal year have been reclassified. As a result, ¥122,374 thousand presented as “Other” under “Non-operating income” in the Non-consolidated Statements of Income for the previous fiscal year has been reclassified as ¥14,457 thousand of “Commission income” and ¥107,916 thousand of “Other.” (Equity in earnings (losses) of affiliates if equity method is applied) There are no applicable matters as the Company does not have any affiliated companies. (Segment information, etc.) [Segment information] [Related information] Since the Company’s business comprises a single segment, this information has been omitted. Previous fiscal year (February 21, 2020 to February 20, 2021) 1. Information by product or service Since net sales to external customers in a single product and service category constitute more than 90% of net sales on the Non-consolidated Statements of Income, this information has been omitted. 2. Information by region (1) Net sales Since net sales to external customers in Japan constitute more than 90% of net sales on the Non-consolidated Statements of Income, this information has been omitted. (2) Property, plant and equipment Since the amount of property, plant and equipment located in Japan constitutes more than 90% of the amount of property, plant and equipment on the Non-consolidated Balance Sheets, this information has been omitted. 3. Information by major customer Among net sales to external customers, since no customer accounts for 10% of net sales on the Non-consolidated Statements of Income, this information has been omitted. Fiscal year under review (February 21, 2021 to February 20, 2022) 1. Information by product or service Since net sales to external customers in a single product and service category constitute more than 90% of net sales on the Non-consolidated Statements of Income, this information has been omitted. -13- 2. Information by region (1) Net sales Since net sales to external customers in Japan constitute more than 90% of net sales on the Non-consolidated Statements of Income, this information has been omitted. (2) Property, plant and equipment Since the amount of property, plant and equipment located in Japan constitutes more than 90% of the amount of property, plant and equipment on the Non-consolidated Balance Sheets, this information has been omitted. 3. Information by major customer Among net sales to external customers, since no customer accounts for 10% of net sales on the Non-consolidated Statements of Income, this information has been omitted. [Information regarding impairment losses on non-current assets by reporting segment] Previous fiscal year (February 21, 2020 to February 20, 2021) Since the Company’s business comprises a single segment, this information has been omitted. Fiscal year under review (February 21, 2021 to February 20, 2022) Since the Company’s business comprises a single segment, this information has been omitted. [Information regarding amortization and unamortized balance of goodwill by reporting segment] [Information regarding gain on bargain purchase by reportable segment] For the fiscal year ended February 20, 2021 For the fiscal year ended February 20, 2022 ¥1,246.10 ¥180.91 ¥1,353.52 ¥135.68 (Notes) 1. Diluted earnings per share are not stated as there were no dilutive shares. 2. The basis for calculating basic earnings per share is as follows: For the fiscal year ended February 20, 2021 For the fiscal year ended February 20, 2022 Profit on the Non-consolidated Statements of Income (Thousand yen) Amount not attributable to common shareholders (Thousand yen) Profit relating to common shares (Thousand yen) Average number of shares outstanding during the period (Shares) 4,717,827 3,541,677 — — 4,717,827 3,541,677 26,078,857 26,103,153 Not applicable. Not applicable. (Per share information) Net assets per share Basic earnings per share -14- 3. In the calculation of “net assets per share,” the Company’s shares held by the Executive Remuneration BIP trust (161,590 shares in the previous fiscal year, 126,070 shares in the fiscal year under review) were included in the amount of treasury shares deducted from the number of issued shares at the end of the fiscal year. Furthermore, in the calculation of “basic earnings per share”, the above-mentioned shares were included in the number of treasury shares deducted when calculating the average number of shares outstanding during the period (161,590 shares in the previous fiscal year, 137,261 shares in the fiscal year under review). (Significant subsequent events) Not applicable. -15- 4. Others (1) Results of Purchases The results of purchases by item for the fiscal year under review are listed below. Fiscal year ended February 20, 2022 Amount (Thousand yen) Year-on-Year Change (%) (Note) The above amounts do not include consumption tax, etc. (2) Results of Sales The results of sales by item for the fiscal year under review are listed below. Fiscal year ended February 20, 2022 Amount (Thousand yen) Year-on-Year Change (%) 32,061,799 5,190,419 652,587 37,904,806 51,547,822 12,099,056 155,175 7,596,945 71,398,999 107.4 103.8 93.0 106.6 103.4 102.6 98.5 99.3 102.8 (Notes) 1. The above amounts do not include consumption tax, etc. 2. No business partner accounts for 10% or more of the total results of sales. Item Bicycles Others Parts and accessories Total Item Parts and accessories Bicycles Royalties Others Total (3) Changes in Officers (i) Changes in Representative Not applicable. (ii) Changes in Other Officers Not applicable. -16-