アークス（9948） – (delayed)Summary of Consolidated Financial Results for the Year Ended February 28,2022(Based on Japanese GAAP）

Translation Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Summary of Consolidated Financial Results for the Year Ended February 28, 2022 (Based on Japanese GAAP) April 14, 2022 Company name: ARCS COMPANY,LIMITED Stock exchange listing: Tokyo, Sapporo Stock code: 9948 URL http://www.arcs-g.co.jp/ Representative: Inquiries: President Director,Executive Vice President Kiyoshi Yokoyama Koichi Furukawa TEL 011-530-1000 Scheduled date of ordinary general meeting of shareholders: Scheduled date to file Securities Report: Scheduled date to commence dividend payments: Preparation of supplementary material on financial results: May 24, 2022 May 24, 2022 May 25, 2022 Yes Yes (for institutional investors and Investment analysts) (Amounts less than one million yen are rounded down)1. Consolidated financial results for the year ended February 28, 2022 (from March 1, 2021 to February 28, 2022) Net sales Operating profit Ordinary profit Percentages indicate year-on-year changesProfit attributable to owners of parent Year ended February 28, 2022 Year ended February 28, 2021 Millions of yen 577,568 556,946 % Millions of yen 15,562 3.7 17,748 7.3 % Millions of yen 17,306 19,503 (12.3)46.4 % Millions of yen 10,304 12,967 (11.3) 41.9 % (20.5)88.7 Holding of financial results meeting: (1) Consolidated operating results Earnings per share Diluted earnings per share Ordinary profit/total assets Operating profit/net sales Profit attributable to owners of parent/equity Yen 182.47 229.59 Yen – – % 6.4 8.6 % 6.8 8.1 Total assets Net assets Equity ratio Net assets per share Millions of yen 258,025 251,032 Millions of yen 163,995 157,504 % 63.5 62.7 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Millions of yen 14,247 29,047 Millions of yen (4,417)(5,627)Millions of yen (7,422)(3,887)Millions of yen 66,175 63,767 % 2.7 3.2 Yen 2,910.41 2,787.27 Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Total cash dividends (Total) Dividend payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) Yen – – – Yen 25.00 27.00 28.00 Yen – – – Yen 30.00 30.00 29.00 Yen Millions of yen 55.00 57.00 57.00 3,106 3,214 % 24.0 31.2 29.4 % 2.1 2.0 Year ended February 28, 2022 Year ended February 28, 2021 (2) Consolidated financial position As of February 28, 2022 As of February 28, 2021 (3) Consolidated cash flows Year ended February 28, 2022 Year ended February 28, 2021 2. Cash dividends Year ended February 28, 2021 Year ended February 28, 2022 Year ending February 28, 2023 (Forecast) 13. Forecast of consolidated financial results for the year ending February 28, 2023 (from March 1, 2022 to February 28, 2023) Net sales Operating profit Ordinary profit Millions of yen % Millions of yen % Millions of yen % Millions of yen % 283,000 563,000 – – 7,900 15,150 – – 9,000 (2.7)5,950 (0.7)17,350 0.3 10,900 5.8 Yen 105.65 193.55 Percentages indicate year-on-year changesProfit attributable to owners of parent Earnings per share Six months ending August 31, 2022 Full year 4. Notes (1) Changes in significant subsidiaries during the year ended February 28, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation): (2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: Changes in accounting policies due to other reasons: Changes in accounting estimates: Restatement of prior period financial statements: No No No No No (3) Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) As of February 28, 2022 57,649,868 shares As of February 28, 2021 57,649,868 shares As of February 28, 2022 1,330,903 shares As of February 28, 2021 1,171,181 shares Number of treasury shares at the end of the period Average number of shares during the period Year ended February 28, 2022 56,472,836 shares Year ended February 28, 2021 56,478,886 shares 2 As of February 28, 2021 As of February 28, 2022 (Millions of yen) 63,835 4,031 14,519 8,478 (30) 90,834 130,377 (86,653) 43,723 68,651 11,456 (7,257) 4,199 8 27,318 (22,719) 4,599 121,183 327 10,775 356 339 11,799 10,392 65 99 10,676 5,177 819 (13) 27,216 160,198 251,032 66,305 4,768 15,821 9,101 (48) 95,949 142,029 (97,773) 44,256 71,832 11,879 (7,610) 4,268 180 28,821 (23,811) 5,009 125,547 233 9,535 43 333 10,146 10,048 57 32 11,210 4,363 680 (12) 26,380 162,075 258,025 Consolidated financial statements Consolidated balance sheets Assets Current assets Cash and deposits Accounts receivable – trade Inventories Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures Accumulated depreciation and impairment Buildings and structures, net Accumulated depreciation and impairment Land Leased assets Leased assets, net Construction in progress Other Accumulated depreciation and impairment Other, net Total property, plant and equipment Intangible assets Goodwill Software Software in progress Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Retirement benefit asset Leasehold and guarantee deposits Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 3 As of February 28, 2021 As of February 28, 2022 (Millions of yen) 29,237 5,711 1,119 8,070 3,178 4,804 2,177 2,825 3,788 1,787 62,701 11,411 4,351 5,543 – 1,132 4,314 3,780 293 30,826 93,528 21,205 24,996 115,537 (2,752) 158,987 528 (2,094) (1,565) 82 157,504 251,032 30,975 8,699 1,211 6,950 3,040 2,548 878 2,640 3,978 1,739 62,664 11,649 4,282 5,295 278 1,165 4,245 4,172 275 31,365 94,029 21,205 24,996 122,622 (3,094) 165,730 373 (2,192) (1,819) 84 163,995 258,025 Liabilities Current liabilities Accounts payable – trade Short-term borrowings Lease obligations Accounts payable – other Accrued expenses Income taxes payable Accrued consumption taxes Provision for bonuses Provision for point card certificates Other Total current liabilities Non-current liabilities Long-term borrowings Lease obligations Retirement benefit liability Deferred tax liabilities Provision for retirement benefits for directors (and other officers) Long-term guarantee deposits 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 Accumulated other comprehensive income Valuation difference on available-for-sale securities Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets 4Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income (Millions of yen) Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022 556,946 413,797 143,149 3,516 6,871 644 51,896 2,817 65 7,329 1,209 7,957 2,862 8,212 93 31,923 125,401 17,748 50 203 73 587 377 39 710 152 19 114 286 13 289 12 – 0 316 577,568 429,198 148,370 3,761 7,464 757 55,253 2,563 63 7,372 1,194 9,403 2,902 8,745 116 33,207 132,807 15,562 48 200 69 600 372 19 659 161 17 47 227 55 – 141 28 4 230 2,042 1,970 19,503 17,306 Net sales Cost of sales Gross profit Selling, general and administrative expenses The advertising decoration cost a store rental Remuneration for directors (and other officers) Salaries and allowances Provision for bonuses Provision for retirement benefits for directors (and other officers) Provision for point card certificates Retirement benefit expenses Utilities expenses Taxes and dues Depreciation Amortization of goodwill Other Total selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Outsourcing service income Income from point cord Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Provision of allowance for doubtful accounts Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Subsidy income Surrender value of insurance policies Gain on cancellation of leasehold contracts Other Total extraordinary income 5 Extraordinary losses Loss on sale and retirement of non-current assets Loss on cancellation of insurance policies Impairment losses Loss on valuation of investment securities Other Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent (Millions of yen) Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022 140 – 488 6 29 664 19,155 6,215 (32) 6,183 12,972 5 12,967 56 133 489 96 14 790 16,746 5,141 1,294 6,435 10,310 5 10,304 6Consolidated statements of comprehensive income Profit Other comprehensive income Valuation difference on available-for-sale securities 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 Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Millions of yen) Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022 12,972 2,623 155 2,779 15,752 15,746 0 5 10,310 (155) (98) (0) (253) 10,056 10,051 5 7Consolidated statements of changes in equity Fiscal year ended February 28, 2021 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Millions of yen) Total shareholders’ equity Balance at beginning of period 21,205 24,996 105,394 (2,751) 148,845 – 21,205 – 24,996 10,142 115,537 (0) (2,752) 10,142 158,987 Accumulated other comprehensive income Valuation difference on available-for-sale securities Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Balance at beginning of period (2,095) (2,249) (4,345) 81 144,580 (2,824) 12,967 418 (418) (0) (2,824) 12,967 (0) 418 (418) (2,824) 12,967 (0) 418 (418) 2,781 12,923 157,504 2,624 2,624 528 155 155 (2,094) 2,779 2,779 (1,565) 1 1 82 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Increase due to increase in subsidiaries Decrease due to increase in subsidiaries Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Increase due to increase in subsidiaries Decrease due to increase in subsidiaries Net changes in items other than shareholders’ equity Total changes during period Balance at end of period 8 Fiscal year ended February 28, 2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity Balance at beginning of period 21,205 24,996 115,537 (2,752) 158,987 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period (3,219) 10,304 (Millions of yen) Total shareholders’ equity (3,219) 10,304 (342) (3,219) 10,304 (342) (252) 6,491 163,995 (342) 1 1 84 (155) (155) 373 (98) (98) (2,192) (253) (253) (1,819) – 21,205 7,085 122,622 (342) (3,094) 6,743 165,730 Accumulated other comprehensive income Valuation difference on available-for-sale securities Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Balance at beginning of period 528 (2,094) (1,565) 82 157,504 0 0 24,996 9 Consolidated statements of cash flows Cash flows from operating activities Profit before income taxes Depreciation Impairment losses Amortization of goodwill Interest and dividend income Interest expenses Loss (gain) on sale and retirement of non-current assets Loss (gain) on sale of investment securities Loss (gain) on valuation of investment securities Share of loss (profit) of entities accounted for using equity method Increase (decrease) in provision for retirement benefits for directors (and other officers) Increase (decrease) in retirement benefit liability Increase (decrease) in provision for bonuses Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for point card certificates Decrease (increase) in trade receivables Decrease (increase) in inventories Decrease (increase) in other current assets Increase (decrease) in trade payables Increase (decrease) in other current liabilities Increase (decrease) in accrued consumption taxes Decrease (increase) in guarantee deposits Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities (Millions of yen) Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022 19,155 8,221 488 93 (254) 152 126 (0) 6 (73) 19 (259) 388 13 162 208 552 261 141 1,326 1,583 (17) 194 32,493 238 (142) (3,541) 29,047 16,746 8,752 489 116 (248) 161 0 – 96 (69) 33 (627) (263) 16 79 (552) (334) (260) 454 (1,952) (1,403) 37 333 21,605 234 (154) (7,437) 14,247 10 Cash flows from investing activities Payments into time deposits Proceeds from withdrawal of time deposits Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Proceeds from sale of investment securities Purchase of investment securities Loan advances Proceeds from collection of loans receivable Payments of guarantee deposits Proceeds from refund of guarantee deposits Refund of guarantee deposits received Guarantee deposits received Proceeds from purchase of shares of subsidiaries resulting in change in scope of consolidation Proceeds from cancellation of insurance funds Other, net Net cash provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Purchase of treasury shares Dividends paid Dividends paid to non-controlling interests Other, net Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation Cash and cash equivalents at end of period (Millions of yen) Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022 (96) 96 (4,579) 300 (1,249) 115 (1) (5) 12 (241) 365 (152) 57 – – (248) (5,627) (300) 5,950 (5,198) (0) (2,820) (3) (1,514) (3,887) 19,532 44,212 23 63,767 (96) 234 (5,092) 220 (759) 113 (1) (4) 12 (129) 183 (229) 72 341 795 (79) (4,417) (1,400) 4,400 (5,400) (342) (3,210) (3) (1,464) (7,422) 2,407 63,767 – 66,175 11