[Delayed] Consolidated Financial Results for the Nine Months Ended September 30, 2021 [Japanese GAAP]

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 Nine Months Ended September 30, 2021

[Japanese GAAP]

	November 11, 2021
Company name: CareNet, Inc.	Stock exchange listing: Tokyo Stock Exchange
Securities code: 2150	URL: http://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: -

November 11, 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 nine months ended September 30, 2021 (January 1, 2021 to September 30, 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

%

Nine months ended

5,635

76.9

2,013

94.3

2,031

96.4

1,388

145.3

September 30, 2021

Nine months ended

3,185

48.4

1,036

159.8

1,034

166.2

565

128.2

September 30, 2020

(Note) Comprehensive income:

Nine months ended September 30, 2021: 1,312 million yen

[ 61.6%]

Nine months ended September 30, 2020:

812 million yen

[720.5%]

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

Nine months ended

33.37

33.34

September 30, 2021

Nine months ended

13.63

-

September 30, 2020

(Note)

Diluted earnings per share for the nine months ended September 30, 2020, is not stated as there are no dilutive shares.

On October 1, 2021, the Company conducted a stock split at a ratio of four shares to one share of common stock. Net assets per

share is calculated under the assumption that said stock split occurred at the beginning of the fiscal year ended December 31,

2020.

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of September 30, 2021

8,407

6,698

79.5

154.40

As of December 31, 2020

5,319

3,085

57.8

74.02

(Reference) Equity: As of September 30, 2021:

6,683 million yen

As of December 31, 2020:

3,073 million yen

(Note)

On October 1, 2021, the Company conducted a stock split at a ratio of four shares to one share of common stock. Net assets per

share is calculated under the assumption that said stock split has occurred at the beginning of the fiscal year ended December

31, 2020.

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

-

0.00

-

December 31, 2021

Fiscal year ending

December 31, 2021

2.00

2.00

(forecast)

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

On October 1, 2021, the Company conducted a stock split at a ratio of four shares to one share of common stock. Dividend forecast amounts for the fiscal year ending December 31, 2021, have taken said stock split into account.

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
Full year	7,664		44.5	2,211	46.4	2,222	47.5	1,400	71.7	33.71

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

On October 1, 2021, the Company conducted a stock split at a ratio of four shares to one share of common stock. Basic earnings per share for the consolidated financial results forecast for the fiscal year ending December 31, 2021, have taken said stock split into account.

• 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
As of September 30, 2021	45,952,000 shares	As of December 31, 2020	44,192,000 shares
	the period (including treasury stock)
2)	Number of shares of treasury stock at the	As of September 30, 2021	2,665,568 shares	As of December 31, 2020	2,665,168 shares
	end of the period
3)	Average number of shares of common	Nine months ended	41,597,385 shares	Nine months ended	41,526,976 shares
	stock during the period (cumulative)	September 30, 2021	September 30, 2020

(Note) On October 1, 2021, the Company conducted a stock split at a ratio of four shares to one share of common stock. The number of shares issued at the end of the period, number of shares of treasury stock at the end of the period, and average number of shares of common stock during the period are calculated assuming that said stock split occurred at the beginning of the fiscal year ended December 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		Nine months under review
				(As of December 31, 2020)		(As of September 30, 2021)
	Assets
	Current assets
	Cash and deposits			2,406,402		5,694,447
	Notes and accounts receivable - trade	1,758,667	1,397,376
	Inventories			30,217		35,591
	Prepaid expenses	45,179	45,253
	Other			85,317		43,658
	Total current assets		4,325,784	7,216,327
	Non-current assets
	Property, plant and equipment	41,550	120,997
	Intangible assets
	Goodwill	80,747	111,053
	Other			100,400		92,551
	Total intangible assets		181,147	203,605
	Investments and other assets			770,929		866,353
	Total non-current assets		993,627	1,190,956
	Total assets			5,319,411		8,407,283
	Liabilities
	Current liabilities
	Accounts payable - trade	71,406	65,458
	Income taxes payable			608,791		426,963
	Advances received	11,223	6,914
	Provision for bonuses for directors (and other officers)			220,000		－
	Provision for point card certificates	525,665	645,168
	Asset retirement obligations			－		14,796
	Other	772,344	524,582
	Total current liabilities			2,209,431		1,683,884
	Non-current liabilities
	Long-term borrowings			10,000		10,000
	Asset retirement obligations	14,622		－
	Provision for share awards for directors (and other			-		14,899
	officers)
	Total non-current liabilities	24,622	24,899
	Total liabilities			2,234,053		1,708,783
	Net assets
	Shareholders' equity
	Share capital	627,045	1,816,382
	Capital surplus			551,260		2,027,959
	Retained earnings	2,210,214	3,515,305
	Treasury shares			(451,038)		(739,482)
	Total shareholders' equity		2,937,483	6,620,164
	Accumulated other comprehensive income
	Valuation difference on available-for-sale securities	138,388	68,116
	Foreign currency translation adjustment			(2,049)		(4,845)
	Total accumulated other comprehensive income		136,339	63,270
	Share acquisition rights			－		10,001
	Non-controlling interests		11,535	5,063
	Total net assets			3,085,357		6,698,500
	Total liabilities and net assets		5,319,411	8,407,283
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(2) Quarterly consolidated statements of income and comprehensive income

(Quarterly consolidated statements of income)

(For the nine months ended September 30, 2021)

				(Thousand yen)
			Previous nine months period	Nine months under review
			(January 1, 2020 to	(January 1, 2021 to
			September 30, 2020)	September 30, 2021)
	Net sales		3,185,786	5,635,803
	Cost of sales	957,036	1,702,298
	Gross profit		2,228,749	3,933,504
	Selling, general and administrative expenses		1,192,342	1,919,900
	Operating profit		1,036,406	2,013,603
	Non-operating income
	Interest income		421	110
	Dividend income	4,997	7,920
	Commission income		1,631	－
	Dividend income of insurance	1,650	1,939
	Foreign exchange gains		－	9,871
	Reversal of allowance for doubtful accounts		－	290
	Miscellaneous income		599	5,101
	Total non-operating income		9,300	25,233
	Non-operating expenses
	Interest expenses	3,681	1,664
	Foreign exchange losses		4,534	－
	Provision of allowance for doubtful accounts	2,910	－
	Share acquisition rights issuance costs		－	3,437
	Miscellaneous loss	163	2,539
	Total non-operating expenses		11,290	7,641
	Ordinary profit		1,034,416	2,031,196
	Extraordinary losses
	Loss on valuation of investment securities	120,600	－
	Total extraordinary losses		120,600	－
	Profit before income taxes		913,816	2,031,196
	Income taxes - current		376,334	721,849
	Income taxes - deferred	(31,383)	(76,570)
	Total income taxes		344,950	645,278
	Profit		568,866	1,385,917
	Profit (loss) attributable to non-controlling interests		3,019	(2,226)
	Profit attributable to owners of parent		565,846	1,388,143

2

(Quarterly consolidated statements of comprehensive income) (For the nine months ended September 30, 2021)

				(Thousand yen)
			Previous nine months period	Nine months under review
			(January 1, 2020 to	(January 1, 2021 to
			September 30, 2020)	September 30, 2021)
	Profit		568,866	1,385,917
	Other comprehensive income
	Valuation difference on available-for-sale securities		242,636	(70,272)
	Foreign currency translation adjustment	1,050	(2,796)
	Total other comprehensive income		243,687	(73,068)
	Comprehensive income		812,553	1,312,848
	Comprehensive income attributable to:
	Owners of parent	809,533	1,315,075
	Non-controlling interests		3,019	(2,226)

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