Beaglee : Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021

November 12, 2021

Consolidated Financial Results

for the Third Quarter of the Fiscal Year Ending December 31, 2021

[Japanese GAAP]

Company name:	Beaglee Inc.	Listed on: Tokyo Stock Exchange
Stock code:	3981	URL: https://www.beaglee.com/
Representative:	Jimpei Yoshida	President and Representative Director
Contact:	Yuichi Sakurai	Director, Director of Administration Department,
		General Manager of Corporate Communication and Investor Relations Office
		Tel.: [phone]

Scheduled date of quarterly report submission:	November 12, 2021
Date for commencement of dividend payments:	−
Supplementary notes to quarterly financial statements:	Yes
Briefing on quarterly financial statements:	None
	(Rounded down to nearest million yen)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021 (January 1 to September 30, 2021)

(1) Consolidated Operating Results (cumulative)

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of the parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Third quarter of the fiscal year

14,107

‒

946

‒

840

‒

338

‒

ending December 31, 2021

Third quarter of the fiscal year

‒

‒

‒

‒

‒

‒

‒

‒

ended December 31, 2020

For reference:

Comprehensive income

Third quarter of the fiscal year ending December 31, 2021:

338 million yen (- %)

Third quarter of the fiscal year ended December 31, 2020:

−million yen (- %)

Net income per share

Net income per share fully

diluted

Yen

Yen

Third quarter of the fiscal year

56.92

56.23

ending December 31, 2021

Third quarter of the fiscal year

‒

‒

ended December 31, 2020

Note:

Figures for the third quarter of the fiscal year ended December 31, 2020 and year-on-year change have been omitted because the Company

began preparing consolidated financial statements from the end of the fiscal year ended December 31, 2020.

(2)

Consolidated Financial Position

Total assets

Net assets

Capital-to-asset ratio

Millions of yen

Millions of yen

%

As of September 30, 2021

19,538

5,564

28.5

As of December 31, 2020

20,036

5,206

26.0

For reference:

Shareholders' equity

As of September 30, 2021

5,564 million yen

As of December 31, 2020

5,206 million yen

Note:

The Company finalized provisional accounting treatment related to business combinations in the third quarter under review. Numerical

figures for the fiscal year ended December 21, 2020 reflect the finalized provisional accounting treatment.

2. Dividends

				Annual dividends
	End of 1st quarter	End of 2nd quarter		End of 3rd quarter	Year-end		Full year
	Yen	Yen		Yen	Yen		Yen
Fiscal year ended December	−	0.00		−	0.00	0.00
31, 2020
Fiscal year ending December	−	0.00		−
31, 2021
Fiscal year ending December					−		−
31, 2021 (Forecast)
Note: Revisions from the most recently announced dividend forecast: None

Note: The Company's date of record for dividends is the final day of the second quarter and final day of the fiscal year per the provisions of the Articles of Incorporation. The dividend forecast amount for the applicable date of record is undetermined at the current point in time.

3. Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2021 (January 1 to December 31, 2021)

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Net income per

owners of the parent

share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

19,682

−

1,350

−

1,210

−

524

−

84.87

Note:

Revisions from the most recently announced earnings forecast: None

Note:

Year-on-year changes have been omitted because the Company began preparing consolidated financial statements from the end of the fiscal

year ended December 31, 2020.

* Notice

(1) Changes in important subsidiaries during the cumulative third quarter under review (change in specified subsidiaries which accompanies a change in the scope of consolidation): None

New: None

Exclusion: None

1. Application of special accounting treatment for the preparation of the quarterly financial statements: Yes
   Note: For details, refer to page 9 of the attached materials "(3) Notes to Quarterly Consolidated Financial Statements."
2. Changes in accounting policy and changes and restatements of accounting estimates
3. 1. Changes in accounting policy accompanying the revision of accounting standards: None
   2. Changes in accounting policy other than those listed in (a): None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of shares issued (common stock)
5. 1. Number of shares issued at end of period (including treasury shares)

	September 30, 2021	6,201,322 shares	December 31, 2020	6,175,661 shares
(b) Number of treasury shares at end of period
	September 30, 2021	243,228 shares	December 31, 2020	246,723 shares

(c) Average number of shares during the period (cumulative from the beginning of the fiscal year)

September 30, 2021	5,943,562 shares	September 30, 2020	5,909,981 shares

• The Company's quarterly financial statements are not subject to quarterly review by a certified public accountant or audit corporation.
• Appropriate use of earnings forecasts and other pertinent information (Cautionary Statement with Respect to Forward-Looking Statements)

These materials contain various forward-looking statements and other forecasts regarding performance and other matters. Such statements are based on information available at the time of preparation as well as certain reasonable assumptions. Actual results may differ materially from those expressed or implied by forward-looking statements due to a range of factors. For notices concerning underlying assumptions of the earnings forecast and the use of the earnings forecast, refer to page 4 of the Supplemental Materials "1. Qualitative Information on the Quarterly Financial Results (3) Explanation of Forward-Looking Information including Consolidated Earnings Forecast."

• Supplemental Materials

1. Qualitative Information on the Quarterly Financial Results .........................................................................................	2
(1)	Explanation of Operating Results .........................................................................................................................	2
(2)	Explanation of Financial Condition ......................................................................................................................	4
(3)	Explanation of Forward-Looking Information including Consolidated Earnings Forecast ..................................	4
2. Quarterly Consolidated Financial Statements and Notes ..............................................................................................	5
(1)	Quarterly Consolidated Balance Sheet .................................................................................................................	5
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income ........................................................................................................................................	7
(3)	Notes to Quarterly Consolidated Financial Statements ........................................................................................	9
	(Notes on the Going-Concern Assumption) .........................................................................................................	9
	(Notes on Significant Changes in the Amount of Shareholders' Equity) .............................................................	9
	(Application of Special Accounting Treatment for Preparation of Quarterly Consolidated
	Financial Statements)..........................................................................................................................................	9
	(Segment Information, etc.) ..................................................................................................................................	9
	(Business Combinations) ....................................................................................................................................	10
	(Additional Information) ....................................................................................................................................	10
	(Significant Subsequent Events) .........................................................................................................................	11

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1. Qualitative Information on the Quarterly Financial Results

Forward-looking statements made below have been determined by the Company as of the final day of the consolidated third quarter under review.

Furthermore, the Group has not carried out comparison analysis with the previous cumulative third quarter for its explanation of management results because it began preparing consolidated financial statements from the end of the previous fiscal year.

In addition, regarding the business combination with NSSK-CC conducted on October 8, 2020 (trade name changed to Bunkasha Group Co., Ltd. effective January 1, 2021), the Company conducted provisional accounting treatment in the previous fiscal year, but this treatment was finalized in the third quarter under review. As a result, the comparison analysis with the end of the previous fiscal year during the explanation of financial situation uses figures after review using the finalized provisional accounting treatment.

(1) Explanation of Operating Results

During the consolidated cumulative third quarter under review, Japan's economy continues to see a recovery as the vaccination rate against COVID-19 increases and countermeasures are being carried out to stop the spread of infections, but a state of emergency was declared for the Greater Tokyo Metropolitan Area and other regions in July and later, indicating uncertainty remains concerning the future.

Amidst this situation, the e-book market, mainly comics, continued to see an increase in customer traffic and higher average purchases while last year the market experienced substantial growth. The e-book and e-comic markets are expected to continue growing. (Source: Impress Corporation estimates, "Ebook Business Survey Report 2021")

However, the reactionary bounce from people voluntarily staying at home is beginning to appear as the number of COVID-19 cases eases. The e-book market is expected to gradually become saturated as e-book business models diversify and mature. Furthermore, although damages to the e-book market from pirated comic websites continue to grow, the Group believes that it is only minimally impacted. The Group will continue to gather information while closely monitoring the situation and take necessary measures after coordinating with relevant industry groups.

Given this market climate, the Group focused on building and growing the Manga Kingdom brand. Additionally, the Bunkasha Group's contents are growing steadily, and with the continued publication of high quality works, not just the wealth of works accumulated thus far, the Bunkasha Group is becoming a source of content production. Within the Group, the Bunkasha Group is increasing its presence as an important driver of medica mix expansion, and we will continue to deepen collaboration for generating greater synergies within the Group.

Moreover, in light of the growing COVID-19 pandemic, following similar efforts in the previous fiscal year, the Group is implementing countermeasures for preventing the occurrence and spread of infections and securing the safety of suppliers, employees, and other stakeholders, and striving to balance these initiatives with business growth.

In this management environment, the Group posted record high net sales continuously from the fourth quarter of the previous fiscal year.

As a result, consolidated net sales for the cumulative third quarter under review totaled 14,107,931 thousand yen, consolidated operating profit came in at 946,427 thousand yen, consolidated ordinary profit was 840,138 thousand yen and profit attributable to owners of the parent totaled 338,302 thousand yen.

The management results for each segment are presented below.

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