Golf Digest Online : Consolidated Financial Results for the Three Months Ended March 31, 2024

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.

Consolidated Financial Results for the Three Months Ended March 31, 2024

[Japanese GAAP]

		May 13, 2024
Company name:	Golf Digest Online Inc.
Stock exchange listing:	Tokyo
Code number:	3319
URL:	https://www.golfdigest.co.jp
Representative:	Nobuye Ishizaka	President and CEO
Contact:	Ryo Nakamura	CFO
Phone:	[phone]
Scheduled date of filing quarterly securities report:		May 14, 2024
Scheduled date of commencing dividend payments:		-
Availability of supplementary briefing material on quarterly financial results:	Yes
Schedule of quarterly financial results briefing session:		No

					(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Three Months Ended March 31, 2024 (January 1, 2024 to March 31, 2024)
(1) Consolidated Operating Results				(% indicates changes from the previous corresponding period.)
	Net sales	EBITDA	Operating profit	Ordinary profit	Profit attributable
	to owners of parent
Three months ended	Millions of		Millions of		Millions of		Millions of		Millions of
yen	%	yen	%	yen	%	yen	%	yen	%
March 31, 2024	12,959	11.2	213	(55.6)	(916)	-	(619)	-	(823)	-
March 31, 2023	11,652	21.6	481	(38.6)	(437)	-	(304)	-	13	(98.6)

(Note) Comprehensive income:	Three months ended March 31, 2024:
	Three months ended March 31, 2023:

¥	(862) million	[	-%]
¥	17 million	[	(98.4) %]

		Basic earnings	Diluted earnings per
		per share		share
Three months ended		Yen			Yen
March 31, 2024		(51.05)			-
March 31, 2023		(4.55)			-
(Note) EBITDA=Ordinary profit + Depreciation + Amortization of goodwill + Amortization of long-term prepaid expenses.
(Note) Diluted earnings per share is not shown because net loss per share was recorded, although there are residual shares.
(2) Consolidated Financial Position
		Total assets		Net assets	Capital adequacy ratio	Net assets per share
As of		Millions of yen		Millions of yen	%	Yen
March 31, 2024		47,976			899	1.9	(309.99)
December 31, 2023		46,700			1,732	3.7	(258.42)
(Reference) Equity:	As of March 31, 2024:	¥	897 million
	As of December 31, 2023:	¥	1,730 million

(Note) The "Net assets per share" is calculated by deducting the amount paid for Class A preferred shares, which have different rights from those of common shares, and the amount for preferred dividend from total net assets.

2. Dividends

				Annual dividends
	1st	2nd		3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
	Yen		Yen	Yen		Yen	Yen
Fiscal year ended December 31, 2023	-		4.00	-		0.00	4.00
Fiscal year ending December 31, 2024	-
Fiscal year ending December 31, 2024			-	-		-	-
(Forecast)
(Note) Revision to the forecast for dividends announced most recently:	No
(Note) The dividend forecast for the fiscal year ending December 31, 2024, is "undecided" at this time.

(Note) The above-mentioned "Dividends" refers to the status of dividends on common shares. For information on the status of dividends on class shares (unlisted) with different relationship of interest from the common shares, see "Cash dividends on class shares" below.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2024(January 1, 2024 to December 31, 2024) (% indicates changes from the previous corresponding period.)

									Profit		Basic earnings
	Net sales	EBITDA	Operating profit	Ordinary profit	attributable to
									owners of parent	per share
	Millions		Millions		Millions		Millions		Millions
	of yen	%	of yen	%	of yen	%	of yen	%	of yen		%	Yen
Full year	57,500	8.7	5,150	15.3	800	110.3	0	-	(600)		-	(57.70)
(Note) Revision to the financial results forecast announced most recently:	No
(Note) "EBITDA "added from Fiscal Year ended December 31,2024.

EBITDA = Ordinary profit + Depreciation + Amortization of goodwill + Amortization of long-term prepaid expenses.

• Notes:

1. Changes in significant subsidiaries during the three months ended March 31, 2024

(changes in specified subsidiaries resulting in changes in scope of consolidation):	No
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:	No

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: No
   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)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

March 31, 2024:	18,274,000	shares
December 31, 2023:	18,274,000	shares
2) Number of treasury shares at the end of the period:
March 31, 2024:	70,393	shares
December 31, 2023:	70,393	shares

3) Average number of shares outstanding during the period:
Three months ended March 31, 2024:	18,203,607	shares
Three months ended March 31, 2023:	18,203,607	shares

(Note) Board Benefit Trust (BBT), a stock compensation plan for directors, has been implemented since FY2022, and Golf Digest Online Inc.'s shares held by the Trust are included in the treasury shares.

• Quarterly Consolidated financial results (Japanese GAAP) are not subject to audit.
• The forward-looking statements described in this document including financial results forecasts, etc., are based on information currently available to Golf Digest Online Inc. and certain assumptions that are deemed to be reasonable as of the date of the release

of this document. Golf Digest Online Inc. makes no warranty as to the achievability of the forecasts. For the basis of presumption of the results forecast, please refer to "1. Qualitative Information on Third Quarter Consolidated Results (3) Overview of Consolidated Earnings Forecast" on page 2 of the attached document.

Cash dividends on class shares

The following provides a breakdown of the dividends per share related to class shares (Class A preferred shares) with different relationship of interest from the common shares.

			Annual dividends
	1st	2nd	3rd	Year-end	Total
	quarter-end	quarter-end	quarter-end
Fiscal year ended	Yen	Yen	Yen	Yen	Yen
December 31, 2023	-	-	-	0.00	0.00
Fiscal year ending
December 31, 2024	-	-	-	-	-
(Forecast)

(Note) Class A preferred shares were issued on November 25, 2022.

(Note) The dividend amount for Class A shares forecast for the fiscal year ending December 31, 2024 is undecided at this time.

Table of Contents
1.Qualitative Information on Third Quarter Consolidated Results	...2
(1)Overview	of	Operations Results	2
(2)Overview	of	Financial Position	2
(3)Overview of Consolidated Earnings Forecast…	2
2.Quarterly Consolidated Financial Statements	3
(1)Quarterly Consolidated Balance Sheets	3
(2)Quarterly Consolidated Statements of Income and Comprehensive Income	5
(3)Notes to the Consolidated Financial Statements	7
(Notes on Going Concern Assumption) …	7
(Notes in the case of significant changes in shareholders' equity)	7
(Segment Information, etc.)	7
3. Other		8
Important Matters Related to Going Concern Assumption	8

- 1 -

1. Qualitative Information on First Quarter Consolidated Results

(1) Overview of Operating Results

During the first quarter of the fiscal year under review (January 1,2024 to March 31, 2024), the Japanese economy showed a gradual recovery trend due to an increase in personal consumption, centered on service consumption, while being affected by high prices. In addition, the US economy, where our overseas group operates, is showing moderate growth supported by solid personal consumption and a strong labor market, although there are growing concerns about a slowdown. On the other hand, the global economy is facing uncertainty, given its decelerating trend and increasing geopolitical risks.

In the environment surrounding the Internet, markets such as those for e-commerce and Internet-related services continued to expand. Meanwhile, digital technologies, notable examples of which are those for IoT and AI, continued to evolve, advancing digitization in numerous fields. The same applies to the golf market. Reflecting the progress in digital technologies and changes in lifestyles, golfer demand and playing styles are becoming more diverse and changing day by day.

In this environment, the Golf Digest Online Group (the "GDO Group") offered greater playing comfort and pleasure to golfers as a group of IT service providers specializing in golf, with vast quantity of information and the capacity to provide specialized golf services as its strengths. Furthermore, based on the mid-term strategic plan published in February 2024, the Group has been implementing a variety of initiatives to improve the profit margin.

As a result, the Group recorded net sales of 12,959 million yen (up 11.2% year on year) during the first quarter under review (January 1, 2024 to March 31, 2024). Although there were improvements in the profit margin and non-financial indicators for some services due to various initiatives, EBITDA was 213 million yen (down 55.6% year on year), and an operating loss was 916 million yen (an operating loss of 437 million yen in the same period of the previous year), mainly due to the fact that expenses were incurred in advance in the first quarter of the fiscal year. An ordinary loss was 619 million yen (an ordinary loss of 304 million yen in the same period of the previous year), and a loss attributable to owners of parent was 823 million yen (profit attributable to owners of parent of 13 million yen in the same period of the previous year).

The results in each main segment are as follows.

Domestic segment

During the first three months under review, the domestic segment recorded net sales of 6,405 million yen (down 2.4% year on year). Segment income stood at 45 million yen (down 55.6% year on year).

Overseas segment

During the first three months under review, the overseas segment posted net sales of 6,553 million yen (up 28.7% year on year). The segment loss was 962 million yen (compared to the segment loss of 540 million yen a year before).

(2) Overview of Financial Position

Looking at the financial position at the end of the first quarter of the fiscal year under review, total assets stood at 47,976 million yen, up 1,276 million yen from the end of the previous fiscal year. Liabilities totaled 47,077 million yen at the end of the fiscal year under review, increasing 2,109 million yen from the end of the previous fiscal year. Total net assets as of the same date decreased 833 million yen from the end of the previous fiscal year, to 899 million yen.

In terms of the balances of accounts for main items, buildings and structures, accounts payable - trade, and contract liabilities increased by 898 million yen, 848 million yen, and 1,570 million yen, respectively. Retained earnings decreased by 823 million yen.

(3) Overview of Consolidated Earning Forecast

Consolidated results forecasts for the fiscal year ending December 31, 2024 remain unchanged from the consolidated results forecasts announced on February 14, 2024.

- 2 -

Quarterly Consolidated Financial Statements

Quarterly Consolidated Balance Sheets

			(Thousands of yen)
		As of December 31, 2023	As of March 31, 2024
Assets
	Current assets
	Cash and deposits	2,793,940	2,461,661
	Accounts receivable - trade	3,520,712	3,190,575
	Merchandise	6,060,449	6,207,409
	Work in process	1,465	4,415
	Supplies	239,369	251,169
	Other	2,170,818	2,751,945
	Allowance for doubtful accounts	(14,318)	(10,769)
	Total current assets	14,772,437	14,856,407
	Non-current assets
	Property, plant and equipment
	Buildings and structures	8,205,687	9,104,594
	Tools, furniture and fixtures	3,833,303	4,272,314
	Right of use assets	9,271,216	9,457,224
	Other	329,856	106,737
	Accumulated depreciation	(5,467,043)	(6,136,541)
	Total property, plant and equipment	16,173,019	16,804,329
	Intangible assets
	Goodwill	8,084,462	8,320,391
	Other	6,623,252	6,964,280
	Total intangible assets	14,707,714	15,284,672
	Investments and other assets
	Other	1,054,142	1,038,725
	Allowance for doubtful accounts	(6,974)	(7,180)
	Total investments and other assets	1,047,168	1,031,544
	Total non-current assets	31,927,902	33,120,546
	Total assets	46,700,339	47,976,954

- 3 -

				(Thousands of yen)
			As of December 31, 2023	As of March 31, 2024
Liabilities
	Current liabilities
		Accounts payable - trade	2,620,101	3,468,135
		Short-term borrowings	6,771,525	6,611,916
		Current portion of long-term borrowings	1,493,351	1,524,007
		Income taxes payable	430,797	156,394
		Contract liabilities	6,068,296	7,638,397
		Provision for bonuses	-	20,004
		Provision for point card certificates	32,302	29,295
		Provision for shareholder benefit program	44,434	31,279
		Asset retirement obligations	12,677	12,687
		Other	5,487,713	5,764,966
		Total current liabilities	22,961,200	25,257,083
	Non-current liabilities
		Long-term borrowings	11,723,470	11,580,052
		Lease liabilities	9,304,577	9,465,842
		Provision for retirement benefits for directors (and	133,002	135,999
		other officers)
		Provision for share awards for directors (and other	40,350	40,350
		officers)
		Asset retirement obligations	370,530	369,035
		Other	434,456	229,143
		Total non-current liabilities	22,006,387	21,820,423
	Total liabilities	44,967,587	47,077,507
Net assets
	Shareholders' equity
		Share capital	1,458,953	1,458,953
		Capital surplus	111,402	140,448
		Retained earnings	(166,976)	(990,845)
		Treasury shares	(80,253)	(80,253)
		Total shareholders' equity	1,323,125	528,302
	Accumulated other comprehensive income
		Foreign currency translation adjustment	407,294	368,720
		Total accumulated other comprehensive income	407,294	368,720
	Share acquisition rights	2,331	2,424
	Total net assets	1,732,751	899,446
Total liabilities and net assets	46,700,339	47,976,954

- 4 -

Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income (For the three months)

			(Thousands of yen)
		For the three months	For the three months
		ended March 31, 2023	ended March 31, 2024
	Net sales	11,652,896	12,959,203
	Cost of sales	7,820,726	9,006,277
	Gross profit	3,832,169	3,952,925
	Selling, general and administrative expenses	4,269,271	4,869,809
	Operating loss	(437,102)	(916,883)
	Non-operating income
	Interest income	430	18
	Foreign exchange gains	37,463	468,219
	Subsidy income	234,990	-
	Other	3,386	5,702
	Total non-operating income	276,271	473,940
	Non-operating expenses
	Interest expenses	142,175	175,699
	Other	1,613	514
	Total non-operating expenses	143,789	176,213
	Ordinary loss	(304,620)	(619,156)
	Extraordinary income
	Gain on sale of non-current assets	893	22,633
	Other	-	2,976
	Total extraordinary income	893	25,609
	Extraordinary losses
	Loss on retirement of non-current assets	38	14,273
	Loss on litigation	-	44,288
	Extra retirement payments	-	28,832
	Total extraordinary losses	38	87,394
	Loss before income taxes	(303,765)	(680,941)
	Income taxes - current	(7,752)	122,993
	Income taxes - deferred	(309,406)	19,933
	Total income taxes	(317,158)	142,927
	Profit (loss)	13,392	(823,868)
	Profit (loss) attributable to owners of parent	13,392	(823,868)

- 5 -

Quarterly Consolidated Statements of Comprehensive Income (For the three months)

			(Thousands of yen)
		For the three months	For the three months
		ended March 31, 2023	ended March 31, 2024
Profit (loss)	13,392	(823,868)
Other comprehensive income
	Foreign currency translation adjustment	3,720	(38,574)
	Total other comprehensive income	3,720	(38,574)
Comprehensive income	17,113	(862,443)
Comprehensive income attributable to
	Comprehensive income attributable to owners of	17,113	(862,443)
	parent

- 6 -

（3）Notes to Condensed Consolidated Financial Statements (Going Concern Assumption)

Not applicable.

(Significant Changes in Shareholders' Equity)

None

(Segment Information, etc.) (Segment information)

1.Information on net sales and amount of profit or loss by each reported segment Previous consolidated cumulative third quarter (From January 1, 2023 to Mar. 31 2023)

					(Thousands of yen)
		Reported			Amount
		segment			booked in the
				Adjustment	consolidated
	Domestic	Overseas	Total		financial
	(Note) 1	statements.
					(Note) 2
Net sales
Net sales to external customers	6,561,785	5,091,110	11,652,896	-	11,652,896
Internal sales or transferred amount	-	7,480	7,480	(7,480)	-
between segments
Total	6,561,785	5,098,590	11,660,376	(7,480)	11,652,896
Segment profit or loss	102,939	(540,041)	(437,102)	-	(437,102)
Note:

1. Adjustments to segment sales are eliminations between segments
2. Segment profit or loss (-) are consistent with operating profit in the consolidated Statements of Income.
   Consolidated cumulative third quarter (From January 1, 2024 to Mar. 31, 2024)

					(Thousands of yen)
		Reported			Amount
		segment			booked in the
				Adjustment	consolidated
	Domestic	Overseas			financial
	Total	(Note) 1	statements.
					(Note) 2
Net sales
Net sales to external customers	6,405,493	6,553,709	12,959,203	-	12,959,203
Internal sales or transferred amount	-	35,030	35,030	(35,030)	-
between segments
Total	6,405,493	6,588,740	12,994,233	(35,030)	12,959,203
Segment profit or loss	45,734	(962,617)	(916,883)	-	(916,883)
Note:

1. Adjustments to segment sales are eliminations between segments
2. Segment profit is consistent with operating profit in the consolidated statements of income.
3. • 7 -