インフォコム（4348） – [Delayed] Summary of Consolidated Financial Results for the the Fiscal Year Ended March 31, 2022

Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. April 27, 2022 Consolidated Financial Results for the Year Ended March 31, 2022 [Japanese GAAP] Company name: INFOCOM CORPORATION Stock exchange listing: Tokyo Code number: 4348 URL: https://www.infocom.co.jp/ Representative: Norihiro Takehara Contact: Shinya Tanaka Phone: 03-6866-3160 Scheduled date of Annual General Meeting of Shareholders: June 14, 2022 Scheduled date of commencing dividend payments: June 16, 2022 Scheduled date of filing annual securities report: June 15, 2022 Availability of supplementary briefing material on annual financial results: Yes Schedule of annual financial results briefing session: Yes President and CEO Head of Corporate Communications Office 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 01, 2021 to March 31, 2022) (1) Consolidated Operating Results Operating profit Ordinary profit Net sales (% indicates changes from the previous corresponding period.) (Amounts of less than one million yen are rounded down) Fiscal year ended March 31, 2022 March 31, 2021 (Note) Comprehensive income: Million yen 64,586 68,055 Million yen % 10,098 (5.1) 10,812 16.6 Fiscal year ended March 31, 2022: Fiscal year ended March 31, 2021: % (6.6) 31.7 ¥ ¥ Million yen 10,196 10,936 % (6.8) 32.3 5,666 million 7,216 million Profit attributable to owners of parent Million yen 6,912 6,276 (21.5) %] 54.4 %] % 10.1 13.2 [ [ Basic earnings per share Diluted earnings per share Rate of return on equity Ordinary profit to total assets ratio Operating profit to net sales ratio Fiscal year ended March 31, 2022 March 31, 2021 Yen 126.20 114.61 Yen 125.65 114.10 % 16.1 16.2 (Reference) Equity in earnings (losses) of affiliated companies: Fiscal year ended March 31, 2022: Fiscal year ended March 31, 2021: % 17.9 20.9 ¥ ¥ % 15.6 15.9 11 million 8 million (2) Consolidated Financial Position As of March 31, 2022 March 31, 2021 (Reference) Equity: As of March 31, 2022: As of March 31, 2021: (3) Consolidated Cash Flows Total assets Net assets Capital adequacy ratio Net assets per share Million yen 57,531 56,435 Million yen 44,579 41,839 % 76.8 73.5 Yen 806.59 757.76 ¥ ¥ 44,185 million 41,503 million Fiscal year ended March 31, 2022 March 31, 2021 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of period Million yen (3,225) (1,643) Million yen (2,217) (1,761) Million yen 31,700 29,956 Million yen 7,148 9,871 ―1― 2. Dividends Fiscal year ended March 31, 2021 March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) Annual dividends 1st quarter-end Yen 2nd quarter-end Yen 3rd quarter-end Yen Year-end Total Total dividends Payout ratio (consolidated) Dividends to net assets (consolidated) – – – 10.00 13.00 18.00 – – – Yen Yen Million yen 27.00 37.00 37.00 50.00 2,026 2,738 % 32.3 39.6 27.00 45.00 35.2 % 5.2 6.4 (Note) Breakdown of the year-end dividend for the fiscal year ended March 31, 2022 : Commemorative dividend Special dividend – yen – yen 3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 01, 2022 to March 31, 2023) (% indicates changes from the previous corresponding period.) Basic earnings per Profit attributable to owners of parent share % Operating profit Ordinary profit % Million yen % Million yen % Million yen Net sales Million yen Yen 33,000 70,000 1.7 8.4 4,000 (20.0) 4,000 (20.9) 2,700 (21.6) 10,500 4.0 10,500 3.0 7,000 1.3 49.29 127.80 Six months ended September 30, 2022 Full year * Notes: (1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in ) ) scope of consolidation): No New Exclusion: – – (Company name: (Company name: (2) Changes in accounting policies, changes in accounting estimates and retrospective restatement 1) Changes in accounting policies due to the revision of accounting standards: Yes 2) Changes in accounting policies other than 1) above: No 3) Changes in accounting estimates: No 4) Retrospective restatement: No (3) Total number of issued shares (common shares) March 31, 2022: March 31, 2021: 57,600,000 shares 57,600,000 shares 1) Total number of issued shares at the end of the period (including treasury shares): 2) Total number of treasury shares at the end of the period: March 31, 2022: March 31, 2021: 2,819,167 shares 2,829,423 shares 3) Average number of shares during the period: Fiscal Year ended March 31, 2022: Fiscal Year ended March 31, 2021: 54,774,659 shares 54,759,562 shares ―2― (Reference) Summary of Non-consolidated Financial Results 1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 01, 2021 to March 31, 2022) (1) Non-consolidated Operating Results Operating profit Ordinary profit Net sales (% indicates changes from the previous corresponding period.) Net income Fiscal year ended March 31, 2022 March 31, 2021 Million yen 20,788 20,783 % 0.0 (9.9) Million yen 1,827 2,198 % (16.9) (19.1) Million yen 4,803 4,222 % 13.7 (11.8) Million yen 4,080 2,579 % 58.2 (32.2) Basic earnings per share Diluted earnings per share Yen 74.50 47.10 Yen 74.18 46.90 (2) Non-consolidated Financial Position Fiscal year ended March 31, 2022 March 31, 2021 As of March 31, 2022 March 31, 2021 Total assets Net assets Capital adequacy ratio Net assets per share (Reference) Equity: As of March 31, 2022: As of March 31, 2021: ¥ ¥ 25,911 million 25,442 million Million yen 46,265 45,078 Million yen 26,132 25,671 % 56.0 56.4 Yen 473.01 464.53 ―3― 1. Analysis of Business Results 1) Overview of Business Results during the Year under Review During the consolidated fiscal year under review, the Japanese economy continued to face uncertainties, impacted by the prolonged COVID-19 pandemic and geopolitical risks. The e-book market grew further with an increase in users, even as the impact of pirate sites has expanded. The IT-related markets showed signs of recovery for IT investment, which had been limited due to the moderate nature of the recovery in economic activities, which had been stagnant in the wake of the COVID-19 pandemic. In this operating environment, the Infocom Group medium-term management plan (April 2020 to March 2023) emphasized two fundamental policies: (1) pursue growth and (2) continue strengthening our management foundation to support growth. To this end, we identified e-comics and healthcare as priority businesses. In these areas, we pursued continued growth, endeavored to evolve into a services-oriented business, and engaged in co-creation (M&A, overseas expansion). In addition, we completed the relocation of our headquarters, undertaken to pursue work-style reform, on schedule. As a result, the Infocom Group generated net sales of ¥64,586 million, down 5.1% compared to the previous fiscal year. This result was mainly due to firm IT services performance, despite sluggish growth in e-comic sales. Operating profit amounted to ¥10,098 million, down 6.6%, mainly due to cost increases associated with our headquarters relocation. Ordinary income was ¥10,196 million, down 6.8%, and profit attributable to owners of the parent amounted to 6,912 million yen, up 10.1% and representing a new record high. The following paragraphs describe our results by segment. (i) Digital Entertainment Group Our Digital Entertainment Group recorded sales of ¥40,530 million (-7.9% year on year). This result was mainly due to our curbing advertising in our e-comic distribution service owing to the impact of pirate sites and declining effectiveness of advertising. A decline in special demand associated with voluntary restraints on travel outside the home and the lack of major hits in original content also contributed to this result. Despite the impact of lower sales, operating profit amounted to ¥7,760 million (-1.9%), mainly as a result of cost reductions from reduced advertising. In our Mecha Comic business, we bolstered the production of original comics and pursued measures to expand our business fields, including advancing the dramatization of our titles. In addition to measures for the Japanese market, we made preparations for the launch of services in the U.S. Market. Amutus Corporation is the consolidated subsidiary that operates Mecha Comic. During the period, the company endeavored to acquire content, expand its business fields, and grow the market. To improve usability, we created AmuLink Corporation as a means to strengthen our systems infrastructure. AmuLink is responsible for planning and developing systems for our e-comic distribution service in collaboration with Link-U. (ii) Business Solution Group Despite the impact of COVID-19, sales remained steady, amounting to ¥24,055 million and up 0.1% compared with the previous year. While the aforementioned advancements in work-style reform contributed to higher operating margin, operating profit fell 19.5% to ¥2,329 million, mainly due to the recording of ¥850 million yen in headquarters relocation expenses. Sales of radiology systems and work management systems for hospitals in our Health IT business remained strong throughout the year. Overseas, we entered into a business alliance with Docquity, a provider of social media platforms for doctors, to ―4― expand sales of our products in Southeast Asia. In terms of enterprise sales, we began offering GRANDIT miraimil, a cloud service for the integrated ERP GRANDIT software In addition, we made MEDICAL CREATE a subsidiary to expand the scale of sales in the Health IT business and to improve service quality. We also converted Alterbooth to a subsidiary, aiming to advance our services-oriented business and improve development technology for cloud and other services. 2) Overview of Financial Position for the Current Fiscal Year Total assets increased ¥1,095 million from the end of the previous fiscal year to ¥57,531 million. This result was mainly due to an increase in cash and deposits and goodwill resulting from the acquisition of MEDICAL CREATE and Alterbooth as consolidated subsidiaries. This increase was offset in part by a decrease in the market value of investment securities. Total liabilities amounted to ¥12,951 million, down ¥1,644 million compared with the end of the previous fiscal year. This result was mainly due to decrease in accounts payable-trade and income taxes payable, offset in part by contractual liabilities stemming from the adoption of Accounting Standard for Revenue Recognition. Net assets rose ¥2,740 million compared with the end of the previous consolidated fiscal year to ¥44,579 million. This result was mainly due to the posting of profit attributable to owners of the parent, offset in part by a decrease in retained earnings at the beginning of the period in connection with the adoption of Accounting Standard for Revenue Recognition and dividend 3) Overview of Cash Flows for the Current Fiscal Year Cash and cash equivalents as of March 31, 2022 amounted to ¥31,700 million, up ¥1,744 million from one year earlier. The following paragraphs describe cash flows and reasons for major changes in cash flows. [Cash flows from operating activities] Net cash provided by operating activities amounted to ¥7,148 million (¥9,871 million in the previous fiscal year). This result was mainly due to increases stemming from profit before income taxes of ¥10,050 million (¥9,721 million in the previous fiscal year), depreciation (non-cash item) of ¥1,333 million (¥1,142 million), and decreases in accounts receivable-trade and contract assets of ¥1,789 million (¥1,045 million increase in the previous fiscal year). These increases were offset in part by a decrease stemming from ¥4,661 million in income taxes paid (¥2,370 million in the previous fiscal year). [Cash flows from investing activities] Net cash used in investing activities amounted to ¥3,225 million (¥1,643 million in the previous fiscal year). This result was mainly due to purchases of property, plant and equipment of ¥735 million (¥244 million in the previous fiscal year), purchases of software and other intangible assets of ¥989 million (¥767 million), and purchase of shares of MEDICAL CREATE and Alterbooth, both becoming consolidated subsidiaries, of ¥1,055 million (no similar transactions in the previous fiscal year). [Cash flows from financing activities] Net cash used in financing activities amounted to ¥2,217 million (¥1,761 million in the previous fiscal year). This result was mainly due to cash dividends paid of ¥2,190 million (compared to ¥1,697 million in the previous fiscal year). 4) Outlook for the Next Fiscal Year The Japanese economy is expected to gradually recover with the greater adoption of measures to prevent the spread of COVID-19. However, the future remains uncertain due to the impact of geopolitical risks and other factors. package. payments. ―5― The e-book market is projected to continue trending larger, backed by factors that include a growing user base in connection with in-home demand. The IT-related market should see a recovery in IT demand, spurred by increased use of cloud services as investments, which stagnated during the COVID-19 pandemic, recovers. In this environment, the Infocom Group medium-term management plan (April 2020 to March 2023) emphasizes two fundamental policies: (1) pursue growth and (2) continue strengthening our management foundation to support growth. To this end, we have identified e-comics and healthcare as priority businesses. For the fiscal year ending March 31, 2023, we forecast net sales of ¥70,000 million (+8.4% year on year), operating profit of ¥10,500 million (+4.0%), ordinary profit of ¥10,500 million (+3.0%), and profit attributable to owners of parent of ¥7,000 million (+1.3%). The above-stated performance forecasts are based on information as of the date these materials were released. Accordingly, actual results may differ materially from these forecasts, due to a variety of future factors. 2. Basic Perspective on Selection of Accounting Standards Our company applies Japanese standards. We are preparing for the application of IFRS, and to this end we are developing a Group settlement system and in-house manual. We are also considering the timing for the application of IFRS. ―6― Consolidated Financial Statements Consolidated Balance Sheets Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes receivable – trade Accounts receivable – trade Contract assets Inventories Other Allowance for doubtful accounts Total current assets Non-current assets Machinery, equipment and vehicles, net Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Leased assets Accumulated depreciation Leased assets, net Construction in progress Total property, plant and equipment Intangible assets Software Goodwill Other Total intangible assets Investments and other assets Investment securities Shares of subsidiaries and associates Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets (Million yen) As of March 31,2021 As of March 31,2022 – – 29,956 12,502 – 167 1,345 (7) 43,964 1,023 (541) 481 1 (1) 0 1,548 (1,049) 499 365 (291) 73 0 1,054 1,592 – 47 1,639 7,494 242 686 1,551 (198) 9,776 12,471 56,435 31,700 – 14 10,744 155 86 2,472 (7) 45,166 767 (121) 645 6 (5) 1 1,517 (945) 571 335 (295) 40 0 1,259 1,894 1,169 34 3,097 5,744 53 1,421 789 (1) 8,007 12,364 57,531 ―7― (Million yen) As of March 31,2021 As of March 31,2022 Liabilities Current liabilities Accounts payable – trade Lease liabilities Accounts payable – other Income taxes payable Accrued consumption taxes Contract liabilities Advances received Provision for bonuses Other Total current liabilities Non-current liabilities Lease liabilities Retirement benefit liability Deferred tax liabilities 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 Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets Total liabilities and net assets 4,975 48 1,768 2,729 1,189 – 901 1,402 1,225 14,241 32 16 235 70 355 1,590 1,556 37,479 (795) 39,829 1,827 (153) 1,673 228 107 41,839 56,435 4,377 25 1,303 1,298 683 2,725 – 1,336 681 12,432 19 48 – 451 519 1,590 1,480 41,402 (792) 43,680 512 (6) 505 220 173 44,579 57,531 14,596 12,951 ―8― Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income (Million yen) For the fiscal year ended March 31,2021 For the fiscal year ended March 31,2022 10,936 10,196 68,055 34,347 33,708 22,896 10,812 102 8 18 130 1 1 3 0 5 0 – 0 1,002 14 23 – 172 3 1,215 9,721 3,705 (171) 3,533 6,188 (88) 6,276 64,586 33,226 31,359 21,261 10,098 144 11 4 161 0 5 52 4 62 53 0 53 43 11 95 46 – 2 199 10,050 3,233 (13) 3,219 6,831 (81) 6,912 Selling, general and administrative expenses Net sales Cost of sales Gross profit Operating profit Non-operating income Interest and dividend income Share of profit of entities accounted for using equity method Other Total non-operating income Non-operating expenses Interest expenses Foreign exchange losses Partnership loss Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of investment securities Other Total extraordinary income Extraordinary losses Impairment losses Loss on retirement of non-current assets Loss on valuation of investment securities Loss on sale of shares of subsidiaries and associates Provision of allowance for doubtful accounts 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 ―9― Consolidated Statements of Comprehensive Income Profit Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Million yen) For the fiscal year ended March 31,2021 For the fiscal year ended March 31,2022 6,188 1,086 (0) (58) 1,028 7,216 7,303 (87) 6,831 (1,315) – 150 (1,164) 5,666 5,744 (78) ―10― Consolidated Statements of Changes in Net Assets For the fiscal year ended March 31,2021 Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares 1,590 1,456 32,900 (805) 35,140 (Million yen) Total shareholders’ equity (1,697) 6,276 109 (1,697) 6,276 99 10 (0) (0) – (1,697) 6,276 109 991 (58) 1,027 (86) (58) 1,027 (153) 1,673 (86) 5,679 107 41,839 50 50 228 99 4,578 10 4,688 1,590 1,556 37,479 (795) 39,829 Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets 740 0 (94) 646 177 194 36,159 Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Restricted stock compensation 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 Profit attributable to owners of parent Restricted stock compensation Net changes in items other than shareholders’ equity Total changes during period Balance at end of period – 1,086 1,086 1,827 ―11― For the fiscal year ended March 31,2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Million yen) Total shareholders’ equity 1,590 1,556 37,479 (795) 39,829 (798) (798) 1,590 1,556 36,680 (795) 39,030 4 1 (81) (2,190) 6,912 (0) 3 0 (2,190) 6,912 (0) 7 1 (81) – (75) 4,721 3 4,649 1,590 1,480 41,402 (792) 43,680 Balance at beginning of period Cumulative effects of changes in accounting policies Restated balance Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Restricted stock compensation Capital increase of consolidated subsidiaries Net changes in items other than shareholders’ equity Total changes during period Balance at end of period ―12― Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets 1,827 (153) 1,673 228 107 41,839 Balance at beginning of period Cumulative effects of changes in accounting policies Restated balance Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Restricted stock compensation Capital increase of consolidated subsidiaries Net changes in items other than shareholders’ equity Total changes during period Balance at end of period 1,827 (153) 1,673 228 107 41,040 (798) (2,190) 6,912 (0) 7 1 (81) (1,315) 147 (1,167) (1,315) 147 (1,167) (7) (7) 65 65 (1,110) 3,539 512 (6) 505 220 173 44,579 ―13― (Million yen) For the fiscal year ended March 31,2021 For the fiscal year ended March 31,2022 Consolidated Statements of Cash Flows Cash flows from operating activities Profit before income taxes Depreciation Impairment losses Share-based payment expenses Amortization of goodwill Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for loss on orders received Interest and dividend income Loss (gain) on valuation of investment securities Loss (gain) on sale of investment securities Loss (gain) on sale of shares of subsidiaries and associates Decrease (increase) in trade receivables and contract assets Decrease (increase) in inventories Decrease (increase) in other assets Increase (decrease) in trade payables Increase (decrease) in other liabilities Subtotal Interest and dividends received Interest paid 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 Purchase of investment securities Proceeds from sale of investment securities Proceeds from sale of shares of subsidiaries and associates Purchase of shares of subsidiaries resulting in change in scope of consolidation Payments of guarantee deposits Proceeds from refund of guarantee deposits Other, net Net cash provided by (used in) investing activities Cash flows from financing activities Repayments of lease liabilities Dividends paid Other, net Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period ―14― 9,721 1,142 1,002 77 210 172 (8) (69) (102) 23 (0) – (1,045) 224 (196) 413 572 12,137 105 (1) (2,370) 9,871 (244) (767) (178) 6 (478) – – 2 16 (1,643) (54) (1,697) (9) (1,761) (1) 6,465 23,491 29,956 10,050 1,333 43 36 25 (0) (83) – (144) 95 (53) 46 1,789 74 (259) (587) (704) 11,661 148 (0) (4,661) 7,148 (735) (989) (430) 99 150 (1,055) (3) 2 (262) (3,225) (46) (2,190) (2,217) 19 38 1,744 29,956 31,700