Japan System Techniques : 【Delayed】Summary of Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2022

			February 10, 2022
	Summary of Consolidated Financial Results
	for the Third Quarter of Fiscal Year Ending March 31, 2022
	(Nine Months Ended December 31, 2021)
			[Japanese GAAP]
Company name:	Japan System Techniques Co., Ltd.	Listing: Tokyo Stock Exchange, First Section
Stock code:	4323	URL: https://www.jast.jp
Representative:	Takeaki Hirabayashi, President and CEO
Contact:	Hiroyuki Norimoto, General Manager of General Affairs Department	Tel: [phone]
Scheduled date of filing of Quarterly Report:	February 14, 2022
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for quarterly financial results:	None
Holding of quarterly financial results meeting:	None

Note: The original disclosure in Japanese was released on February 10, 2022 at 16:00 (GMT +9).

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter Ended December 31, 2021 (April 1, 2021 - December 31, 2021)

(1) Consolidated results of operations				(Percentages represent year-on-year changes)
	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
	Million yen		%	Million yen	%	Million yen	%	Million yen		%
Nine months ended Dec. 31, 2021	14,985		-	1,297	-	1,331	-	914		-
Nine months ended Dec. 31, 2020	12,142		(3.0)	86	(39.2)	144	(22.2)	(246)		-

Note: Comprehensive income (million yen)	Nine months ended Dec. 31, 2021:	901	(-%)
		Nine months ended Dec. 31, 2020:	(193)	(-%)
	Net income per share	Diluted net income per
	share
		Yen	Yen
Nine months ended Dec. 31, 2021		156.15		-
Nine months ended Dec. 31, 2020		(45.94)		-

Note: Beginning with the first quarter of the fiscal year ending March 31, 2022, JAST has applied Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020). All figures for the nine months ended December 31, 2021 incorporate this accounting standard and comparisons with the first nine months of the previous fiscal year are omitted.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of Dec. 31, 2021	13,750	8,753	63.4	1,421.54
As of Mar. 31, 2021	12,861	6,850	53.0	1,265.96

Reference: Shareholders' equity (million yen) As of Dec. 31, 2021: 8,717 As of Mar. 31, 2021: 6,813

Note: Beginning with the first quarter of the fiscal year ending March 31, 2022, JAST has applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020). All figures as of December 31, 2021 incorporate this accounting standard.

2. Dividends

			Dividend per share
	1Q-end	2Q-end		3Q-end		Year-end	Total
	Yen	Yen		Yen		Yen	Yen
Fiscal year ended Mar. 31, 2021	-	0.00		-		28.00	28.00
Fiscal year ending Mar. 31, 2022	-	0.00		-
Fiscal year ending Mar. 31, 2022 (forecasts)						40.00	40.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentages represent year-on-year changes)

	Net sales		Operating income	Ordinary income	Profit attributable to	Net income per share
		owners of parent
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	21,000		11.8	1,700	39.8	1,730	32.0	1,050	81.4	177.28
Note: Revisions to the most recently announced consolidated earnings forecasts: None

* Notes

(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None

Newly added: -

Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting-based estimates, and restatements

1)	Changes in accounting policies due to revisions in accounting standards, others:	Yes
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting-based estimates:	None
4)	Restatements:	None

(4) Number of outstanding shares (common shares)

1) Number of shares outstanding at the end of the period (including treasury shares)

As of Dec. 31, 2021:	6,209,230 shares	As of Mar. 31, 2021:	5,612,230 shares
2) Number of treasury shares at the end of the period
As of Dec. 31, 2021:	76,766 shares	As of Mar. 31, 2021:	230,423 shares
3) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2021:	5,854,313 shares	Nine months ended Dec. 31, 2020:	5,362,125 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.

Note 2: Cautionary statement with respect to forward-looking statements

Forecasts of future performance in these materials are based on assumption judged to be valid and information available to the Company's management at the time the materials were prepared, but are not promises by the Company regarding future performance. Actual results may differ materially from the forecasts. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements" on page 3 for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/22

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Forecasts and Other Forward -looking Statements	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
	Quarterly Consolidated Statement of Income
	For the Nine-month Period	6
	Quarterly Consolidated Statement of Comprehensive Income
	For the Nine-month Period	7
(3)	Quarterly Consolidated Statement of Cash Flows	8
(4)	Notes to Quarterly Consolidated Financial Statements	10
	Going Concern Assumption	10
	Significant Changes in Shareholders' Equity	10
	Changes in Accounting Policies	10
	Additional Information	11
	Segment and Other Information	11
	Business Combinations	12

1

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first nine months of the current fiscal year, consumer spending and corporate activities in Japan were severely restricted by extended states of emergency declared because of the pandemic and other measures to prevent the spread of infections. In addition, new ways of working and new life styles have emerged because of the pandemic. Although there are expectations for the economy to improve as more people are vaccinat ed and other measures are taken to stop the pandemic, the outlook for the Japanese economy remains uncertain.

In the IT industry in Japan, according to the latest statistics in the "Survey of Selected Service Industries" by the Ministry of Economy, Trade and Industry (the final November 2021 figures), net sales continued to climb, rising 0.4% year on year in fiscal 2020 compared with 4.0% annual growth in fiscal 2019. The latest figures for November 2021 were up 7.6% year on year.

Consolidated sales of the Japan System Techniques Group (Japan System Techniques Co., Ltd. (JAST) and its consolidated subsidiaries, hereafter "the Group") in the first nine months were 14,985 million yen (up 23.4% year on year). Operating income was 1,297 million yen (vs. operating income of 86 million yen in the same period of the previous fiscal year), ordinary income was 1,331 million yen (up 819.2% year on year), and profit attributable to owners of parent was 914 million yen (vs. loss attributable to owners of parent of 246 million yen in the same period of the previous fiscal year).

Business segment performance was as follows.

(Software business)

The performance of this business benefited from the year-on-year increase in orders including large projects and strong sales of BankNeo, a data integration package for financial institutions . A recovery in sales and earnings in the ASEAN region also contributed to a big improvement in the profitability of the software business . Net sales in the first nine months totaled 10,560 million yen (up 22.9% year on year) and the operating income was 545 million yen (vs. operating loss of 122 million yen in the same period of the previous fiscal year).

(GAKUEN business)

Sooner than expected demand at current customers for replacing the current series of university program products with the new GAKUEN RX and GAKUEN UNIVERSAL PASSPORT RX series, which have high profit margins, contributed to the performance of this business. In addition, there was faster than expected progress with sales of these two new series to new customers. An increase in the volume of end user computing (EUC: individualized contracted development of related systems) orders associated with the use of these two new series also contributed to higher profitability in this business. In previous fiscal years, sales for support services for the use of new software and other work in progress was recognized when the final approval of customers was received. Due to the application of the Accounting Standard for Revenue Recognition beginning with the current fiscal year, this revenue is recognized based on progress with fulfilling performance obligations involving individual projects. As a result, net sales in this business totaled 2,462 million yen (up 45.6% year on year) and the operating income was 602 million yen (up 343.5% year on year).

(System sales business)

Delays in the procurement of IT equipment due to the global semiconductor shortage caused sales of IT equipment to universities, the main activity of this business, to decline. As a result, net sales totaled 825 million yen (down 19.9% year on year) and operating income was 40 million yen (down 63.6% year on year).

(Medical big data business)

Sales of automated inspection services for health insurance claims started to recove r in the current fiscal year following the downturn in one year earlier when the number of people using healthcare institutions decreased due to the pandemic. There were also improvements in the performance of analysis services, services for the notification of the cost of medical care, cloud services for managing welfare public assistance version of health

2

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/22

insurance claims, support services for health insurance organizations and other highly profitable businesses. These positive factors increased profitability of this business. In previous fiscal years, sales for a range of services and other work in progress was recognized when the final approval of customers was received. Due to the application of the Accounting Standard for Revenue Recognition beginning with the current fiscal year, this revenue is recognized based on progress with fulfilling performance obligations involving individual projects. As a result, net sales in this business totaled 1,137 million yen (up 37.4% year on year) and operating income was 107 million yen (vs. operating loss of 39 million yen in the same period of the previous fiscal year).

(2) Explanation of Financial Position

1) Balance sheet

Current assets at the end of the third quarter were 10,747 million yen, up 1,051 million yen from the end of the previous fiscal year. This was mainly due to an increase in the collection of accounts receivable -trade linked to performance, and an increase in cash and deposits resulting from the issuance of new shares through the exercise of share acquisition rights and the disposal of treasury shares. Non-current assets were 3,002 million yen, down 162 million yen from the end of the previous fiscal year.

Current liabilities at the end of the third quarter were 3,314 million yen, down 1,073 million yen from the end of the previous fiscal year. This was mainly due to a decrease in provision for bonuses and repayments of short-term borrowings. Non-current liabilities were 1,682 million yen, up 59 million yen from the end of the previous fiscal year.

Net assets at the end of the third quarter were 8,753 million yen, up 1,903 million yen from the end of the previous fiscal year. This increase was mainly due to exercise of share acquisition rights and an increase in retained earnings of 81 million yen at the beginning of the fiscal year due to the application of the Accounting Standard for Revenue Recognition.

2) Cash flows

Cash and cash equivalents increased 802 million yen from 4,853 million yen at the beginning of the current fiscal year to 5,656 million yen at the end of the first nine months of the current fiscal year.

Cash flows by category were as follows.

Net cash provided by operating activities totaled 351 million yen, a decrease of 650 million yen from 1,001 million yen provided in the same period of the previous fiscal year. This decrease was mainly due to increase s in inventories and contract liabilities, and a decrease in proceeds from the collection of trade receivables .

Net cash used in investing activities totaled 88 million yen, a decrease of 192 million yen from 103 million yen provided in the same period of the previous fiscal year. This was due to a decrease in proceeds from redemption of investment securities.

Net cash provided by financing activities totaled 514 million yen, an increase of 1,368 million yen from 853 million yen used in the same period of the previous fiscal year. This was due to increases in proceeds from issuance of shares and proceeds from disposal of treasury shares.

(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

There are no revisions to the January 26, 2022 forecasts for the fiscal year ending March 31, 2022: net sales of 21,000 million yen (up 11.8% year on year), operating income of 1,700 million yen (up 39.8% year on year), ordinary income of 1,730 million yen (up 32.0% year on year), and profit attributable to owners of parent of 1,050 million yen (up 81.4% year on year).

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