GungHo Online Entertainment : Financial Results for the 3rd Quarter of Fiscal Year Ending December 31, 2020

Financial Results for the 3rd Quarter of Fiscal Year Ending December 31, 2020

[Japanese GAAP] (Consolidated)

November 13, 2020

Name of listed company: GungHo Online Entertainment, Inc.

Stock exchange listing: Tokyo Stock Exchange

Code number: 3765

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

Representative: Kazuki Morishita, Representative Director & President, CEO

Contact: Kazuya Sakai, Director & CFO, Executive General Manager of Finance Accounting Division

TEL: [phone]

Quarterly securities report issuing date: November 13, 2020

Dividend payment date: -

Supplemental information for quarterly financial statements: Yes

Quarterly financial results briefing session: Yes (For institutional investors and analysts)

(Amounts are rounded off to the nearest million yen)

1. Consolidated financial results for the 3rd quarter of fiscal year ending December 31, 2020 (January 1, 2020 through September 30, 2020)

(1) Consolidated operating results (accumulated)	(Percentages indicate the changes from previous year)
	Net sales			Operating profit		Ordinary profit		Quarterly net profit
	Millions of yen		%		Millions of yen	%		Millions of yen	%	Millions of yen		%
Nine months ended	67,633		-17.6		19,055	-25.3	19,183	-25.5		11,523		-31.4
September 30, 2020
Nine months ended	82,041		32.8		25,503	47.7	25,735	47.7		16,805		58.5
September 30, 2019
(Note) Comprehensive	Nine months ended 12,608 millions of yen		Nine months ended 17,555 millions of yen
income	September 30, 2020	(-28.2%)		September 30, 2019		(59.4%)
	Quarterly net profit per	Diluted quarterly net
	share			profit per share
			Yen		Yen

Nine months ended

168.62167.80

September 30, 2020

Nine months ended

238.25236.93

September 30, 2019

(Note)Effective July 1, 2019, share consolidation was implemented at a ratio of 1 share per 10 shares of common stock. Accordingly, quarterly net profit per share and diluted quarterly net profit per share are calculated on the assumption that share consolidation was implemented at the beginning of the fiscal year ended December 31, 2019.

(2) Consolidated financial position

	Total assets	Net assets	Shareholders' equity
		ratio
	Millions of yen	Millions of yen		%
Nine months ended	112,751	98,780		80.9
September 30, 2020
Fiscal year ended	105,008	90,765		80.9
December 31, 2019
(Note) Shareholder's	Nine months ended	91,240 millions of yen	Fiscal year ended	84,912 millions of yen
equity	September 30, 2020			December 31, 2019

2. Dividends

			Dividends per share
		1st quarter	2nd quarter	3rd quarter	4th quarter	Total
		Yen	Yen	Yen	Yen	Yen
Fiscal year	ended	―	0.00	―	30.00	30.00
December 31, 2019
Fiscal year	ending	―	0.00
December 31, 2020
Fiscal year ending
December 31, 2020			―	―	―
(Forecast)

(Note1) Revision of forecasts for dividends most recently announced: No:

(Note2) Effective July 1, 2019, share consolidation was implemented at a ratio of 1 share per 10 shares of common stock. Accordingly, this share consolidation has been taken into account for the amount listed under the year-end dividend per share for the fiscal year ended December 31, 2019.

3. Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2020 (From January 1, 2020 to December 31, 2020)

The GungHo Group engages in the content business that is highly novel in nature and is subject to facing sudden, short- term changes in the operating environment. Since this makes it difficult to calculate proper and rational earnings forecasts, the Company adopts the policy of providing timely disclosure of financial results and summary of operations on a quarterly basis while refraining from disclosing its full-year consolidated earnings forecast.

*Notes
(1) Changes in significant subsidiaries during the period	: No

1. Adoption of any particular accounting methods for the preparation of quarterly : No consolidated financial statements
2. Changes in accounting policies, changes in accounting estimates and restatements

1)	Changes in accounting policies due to revisions of accounting standards	: No
2)	Changes in accounting policies due to reasons other than 1)		: No
3)	Changes in accounting estimates			: No
4)	Restatements			: No
(4) Number of shares of common stock issued
1)	Number of shares of common stock	As of September	95,210,316Fiscal year ended	95,210,316
	outstanding at the end of the period
	30, 2020	sharesDecember 31, 2019	shares
	(including treasury shares)
2)	Number of treasury shares at the end of the	As of September	27,337,973Fiscal year ended	25,529,818
	period	30, 2020	sharesDecember 31, 2019	shares
3)	Average number of shares during the third	As of September	68,340,518As of September 30,	70,538,267
	quarter	30, 2020	shares2019		shares

(Note) Effective July 1, 2019, share consolidation was implemented at a ratio of 1 share per 10 shares of common stock. Number of shares of common stock outstanding at the end of the period, number of treasury shares at the end of the period and average number of shares during the period are calculated on the assumption that the share consolidation was conducted at the fiscal year ended December 31, 2019.

• This quarterly Summary of Consolidated Financial Results (Quarterly "Tanshin") is outside the scope of the external auditor's quarterly review procedure.
• Appropriate use of earnings forecast and other matters to note

・This document contains forward-looking statements including forecasts in relation to the results of operations and they are based on information available to the Company at the time of preparing the document along with certain assumptions that are deemed to be rational. Actual results may differ materially from those expressed or implied by the statements due to various factors. For the assumptions underlying the earnings forecast presented and other information regarding the use of such forecasts, please refer to "Information Related to the Consolidated Earnings Forecast and Other Future Projections" on page 2 of the Appendix.

• The Company plans on holding a financial results briefing session for investors as follows. All documents, videos, etc. distributed at the briefing session will be posted on the company's website after the briefing session is held.
• Financial results briefing session for institutional investors and analysts: Friday, November 13, 2020

○Table of Contents for Appendix
1. Qualitative Information Concerning Consolidated Financial Results
for the Quarter Under Review .....................................................................................................................	2
(1) Description of Operating Results..............................................................................................................	2
(2)	Description of Financial Position ..............................................................................................................	2
(3)	Information Related to the Consolidated Earnings Forecast and Other Future Projections......................	3
2. Quarterly Consolidated Financial Statements...............................................................................................	4
(1)	Quarterly Consolidated Balance Sheets...................................................................................................	4
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income...........................................................................................................................	6
	Quarterly Consolidated Statements of Income.........................................................................................	6
	Quarterly Consolidated Statements of Comprehensive Income...............................................................	7
(3) Notes to the Quarterly Consolidated Financial Statements.......................................................................	7
	(Notes on the Going-concern Assumption).............................................................................................	7
	(Notes on Any Significant Changes to the Amount of Shareholders' Equity) ...........................................	7
	(Segment Information)............................................................................................................................	7
	(Significant Subsequent Events).............................................................................................................	7

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