CareNet : Consolidated Financial Results for the Three Months Ended March 31, 2021

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect, or any other forms of damages arising from this translation.

Consolidated Financial Results for the Three Months Ended March 31, 2021

[Japanese GAAP]

May 13, 2021

Company name: CareNet, Inc.

Stock exchange listing: Tokyo Stock Exchange

Securities code:

2150

URL: https://www.carenet.co.jp/

Representative: Katsuhiro Fujii, President

Contact: Kanji Fujii, Director and CFO

Phone: [phone]

Scheduled date for filing quarterly securities report:

Scheduled date for commencing dividend payments: -

May 13, 2021

Preparation of supplementary quarterly financial results briefing materials: No

Holding of quarterly financial results briefing:

No

(Amounts of less than one million yen are truncated.)

1. Consolidated financial results for the three months ended March 31, 2021 (January 1, 2021 to March 31, 2021)

(1) Consolidated operating results (cumulative)

(% indicates year-over-year change)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Three months ended

2,058

150.6

849

347.2

860

358.6

587

-

March 31, 2021

Three months ended

821

20.1

189

52.8

187

55.2

4

(93.2)

March 31, 2020

(Note) Comprehensive income: Three months ended March 31, 2021:

607 million yen

[-%]

Three months ended March 31, 2020:

39 million yen

[-%]

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

Three months ended

56.57

-

March 31, 2021

Three months ended

0.46

-

March 31, 2020

(Note) Diluted earnings per share is not stated as there are no dilutive shares.

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of March 31, 2021

5,191

3,605

69.3

346.72

As of December 31, 2020

5,319

3,085

57.8

296.08

(Reference) Equity:

As of March 31, 2021:

3,599 million yen

As of December 31, 2020:

3,073 million yen

2. Dividends

Annual dividends

First

Second

Third

Fiscal

Total

quarter-end

quarter-end

quarter-end

year-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

-

0.00

-

8.00

8.00

December 31, 2020

Fiscal year ending

-

December 31, 2021

Fiscal year ending

December 31, 2021

0.00

-

8.00

8.00

(forecast)

(Note) Revision to the most recently announced dividend forecast: None

3. Consolidated financial results forecast for the fiscal year ending December 31, 2021 (January 1, 2021 to December 31, 2021)

(% indicates year-over-year change)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	3,800		106.0	1,100	138.2	1,100	139.2	673	274.0	64.82
(cumulative)
Full year	7,664		44.5	2,211	46.4	2,222	47.5	1,400	71.7	134.85

(Note) Revision to the most recently announced financial results forecast: Yes

• Notes

1. Changes in significant subsidiaries during the current period (changes in specified subsidiaries resulting in the changes in the scope of consolidation): None
2. Accounting treatments adopted specially for the preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and retrospective restatements

1)	Changes in accounting policies due to application of new or revised accounting standards:	None
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting estimates:	None
4)	Retrospective restatements:	None

(4) Number of shares of common stock issued

1. Number of shares issued at the end of the period (including treasury stock)
2. Number of shares of treasury stock at the end of the period
3. Average number of shares of common stock during the period (cumulative)

As of March 31, 2021	11,048,000 shares	As of December 31, 2020	11,048,000 shares
As of March 31, 2021	666,292 shares	As of December 31, 2020	666,292 shares
Three months ended	10,381,708 shares	Three months ended	10,381,753 shares
March 31, 2021	March 31, 2020

• These quarterly financial results are not subject to quarterly review procedures to be performed by certified public accountants or an audit firm.
• Explanation on appropriate use of financial results forecasts and other matters of note
  1. Financial results forecasts and other forward-looking statements provided in these materials are estimated based on information available to the Company as of the date of publication. Actual financial results may differ from these forecasts owing to changes in future economic conditions and other factors.

Quarterly consolidated financial statements and major notes

(1) Quarterly consolidated balance sheets

				(Thousand yen)
			Previous fiscal year	Three months under review
			(As of December 31, 2020)	(As of March 31, 2021)
	Assets
	Current assets
	Cash and deposits		2,406,402	2,289,836
	Notes and accounts receivable - trade	1,758,667	1,676,645
	Inventories		30,217	50,320
	Prepaid expenses	45,179	56,726
	Other		85,317	25,903
	Total current assets		4,325,784	4,099,431
	Non-current assets
	Property, plant and equipment	41,550	48,187
	Intangible assets
	Goodwill	80,747	125,795
	Other		100,400	104,477
	Total intangible assets		181,147	230,272
	Investments and other assets		770,929	813,284
	Total non-current assets		993,627	1,091,744
	Total assets		5,319,411	5,191,175
	Liabilities
	Current liabilities
	Accounts payable - trade	71,406	139,649
	Income taxes payable		608,791	308,326
	Advances received	11,223	35,989
	Provision for bonuses for directors (and other officers)		220,000	-
	Provision for point card certificates	525,665	568,801
	Other		772,344	508,329
	Total current liabilities		2,209,431	1,561,097
	Non-current liabilities
	Long-term borrowings	10,000	10,000
	Asset retirement obligations		14,622	14,679
	Total non-current liabilities		24,622	24,679
	Total liabilities		2,234,053	1,585,776
	Net assets
	Shareholders' equity
	Share capital	627,045	627,045
	Capital surplus		551,260	550,795
	Retained earnings	2,210,214	2,714,467
	Treasury shares		(451,038)	(451,038)
	Total shareholders' equity		2,937,483	3,441,270
	Accumulated other comprehensive income
	Valuation difference on available-for-sale securities	138,388	162,432
	Foreign currency translation adjustment		(2,049)	(4,107)
	Total accumulated other comprehensive income		136,339	158,325
	Non-controlling interests		11,535	5,802
	Total net assets		3,085,357	3,605,398
	Total liabilities and net assets		5,319,411	5,191,175

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(2) Quarterly consolidated statements of income and comprehensive income

(Quarterly consolidated statements of income)

(For the three months ended March 31)

				(Thousand yen)
			Previous three months period	Three months under review
			(January 1, 2020 to	(January 1, 2021 to
			March 31, 2020)	March 31, 2021)
	Net sales		821,378	2,058,135
	Cost of sales	266,769	619,154
	Gross profit		554,608	1,438,981
	Selling, general and administrative expenses		364,696	589,609
	Operating profit		189,912	849,371
	Non-operating income
	Interest income		224	42
	Foreign exchange gains		-	8,182
	Reversal of allowance for doubtful accounts		-	590
	Commission income	431	-
	Miscellaneous income		398	2,518
	Total non-operating income		1,054	11,334
	Non-operating expenses
	Interest expenses	587	534
	Foreign exchange losses		871	-
	Provision of allowance for doubtful accounts	1,920	-
	Miscellaneous loss		16	0
	Total non-operating expenses		3,396	534
	Ordinary profit		187,571	860,172
	Extraordinary losses
	Loss on valuation of investment securities		120,600	-
	Total extraordinary losses		120,600	-
	Profit before income taxes		66,971	860,172
	Income taxes - current		54,979	292,520
	Income taxes - deferred		5,159	(18,167)
	Total income taxes		60,138	274,353
	Profit		6,832	585,818
	Profit (loss) attributable to non-controlling interests		2,026	(1,487)
	Profit attributable to owners of parent		4,805	587,306

2

(Quarterly consolidated statements of comprehensive income) (For the three months ended March 31)

				(Thousand yen)
			Previous three months period	Three months under review
			(January 1, 2020 to	(January 1, 2021 to
			March 31, 2020)	March 31, 2021)
	Profit		6,832	585,818
	Other comprehensive income
	Valuation difference on available-for-sale securities		32,074	24,043
	Foreign currency translation adjustment	200	(2,057)
	Total other comprehensive income		32,275	21,985
	Comprehensive income		39,107	607,804
	Comprehensive income attributable to:
	Owners of parent	37,081	609,292
	Non-controlling interests		2,026	(1,487)

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