Kansai Food Market : Summary of Consolidated Financial Results for the Nine Months Ended December 31, 2021 (Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Nine Months Ended December 31, 2021 (Based on Japanese GAAP)

Company name:	Kansai Food Market Ltd.
Stock exchange listing:	Tokyo
Stock code:	9919	URL http://www.kansai-foodmarket.co.jp/
Representative:	President of Representative Director	Katsuhiro Hayashi
Inquiries:	Director and General Manager of	Gaku Watanabe
Administrative Planning Office
Scheduled date to file Quarterly Securities Report:	February 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	No

February 9, 2022

TEL [phone]

				(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021)
(1) Consolidated operating results (cumulative)				Percentages indicate year-on-year changes
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen	% Millions of yen	% Millions of yen	%	Millions of yen	%
Nine months ended December 31, 2021	192,788	-	4,027	-	3,365	-	2,919	-
Nine months ended December 31, 2020	99,316	4.6	2,677	88.1	2,957	75.3	1,973	74.4
Note: Comprehensive income Nine months ended December 31, 2021	¥2,873 million	[-%]
Nine months ended December 31, 2020	¥2,135 million	[105.0%]
	Earnings per share	Diluted earnings per share
		Yen			Yen
Nine months ended December 31, 2021		87.81			-
Nine months ended December 31, 2020		64.83			-

Notes: 1. In the nine months ended December 31, 2021, share exchanges were conducted resulting in the Company becoming the wholly owning parent company in the share exchanges and Izumiya Co., Ltd. and Hankyu Oasis Co., Ltd. becoming the wholly owned subsidiaries in the respective share exchange, and this has been reflected in the consolidated financial statements with December 31, 2021 as the deemed acquisition date for both cases.

As the share exchanges are treated as reverse acquisitions under business combination accounting, the operating results of the nine months ended December 31, 2021 are presented including the operating results of Izumiya Co., Ltd. and Hankyu Oasis Co., Ltd. As the scope of this report is different from prior periods, the percentage changes from the same quarter of the previous year are not stated.

1. 2. As the Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ending March 31, 2022, each figure for the nine months ended December 31, 2021 is the figure after the application of the said accounting standard, etc.

2. Consolidated financial position

		Total assets		Net assets	Equity ratio
		Millions of yen		Millions of yen	%
As of December 31, 2021	149,817	59,794	39.9
As of March 31, 2021		54,720	34,595	63.2
Reference: Equity	As of December 31, 2021	¥59,794	million
	As of March 31, 2021	¥34,595	million

1

2. Cash dividends

									Annual dividends per share
					1st quarter-end		2nd quarter-end	3rd quarter-end		Fiscal year-end	Total
						Yen			Yen				Yen		Yen	Yen
Year ended March 31, 2021					-			8.00					-		10.00	18.00
Year ending March 31, 2022					-			8.00					-
Year ending March 31, 2022 (Forecast)													10.00	18.00
Notes: 1. Revision of cash dividend forecast most recently announced: Yes
2. Breakdown of year-end dividend for the fiscal year ended March 31, 2021
Ordinary dividend	¥8.00		Special dividend	¥2.00
3. Breakdown of year-end dividend for the fiscal year ending March 31, 2022
Ordinary dividend	¥8.00		Special dividend	¥2.00
3. Forecast of consolidated financial results for the year ending March 31, 2022 (from April 1, 2021 to March 31, 2022)
													Percentages indicate year-on-year changes
		Net sales		Operating profit	Ordinary profit		Profit attributable to	Earnings per share
					owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Yen
Full year		289,100			-	5,300	-		4,400		-		7,800	-	196.57
Note: Revision of consolidated financial results forecast most recently announced: Yes

4. Notes

(1) Changes in significant subsidiaries during the nine months ended December 31, 2021Yes (changes in specified subsidiaries resulting in the change in scope of consolidation):

Note: Although this matter does not constitute a change in specified subsidiaries in the nine months ended December 31, 2021, KS Company Split Preparation Co., Ltd. was newly established on September 22, 2021 in order to transition to a holding company structure through an absorption-type company split with an effective date of February 1, 2022, and is included in the scope of consolidation. KS Company Split Preparation Co., Ltd. changed its trade name to Kansai Super Market Ltd. on February 1, 2022.

(2)	Application of special accounting methods for preparing quarterly consolidated financial statements:	No
(3)	Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
	Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
	Changes in accounting policies due to other reasons:			No
	Changes in accounting estimates:				No
	Restatement of prior period financial statements:				No
(4)	Number of issued shares (common shares)
	Total number of issued shares at the end of the period (including treasury shares)
		As of December 31, 2021	63,858,804	shares	As of March 31, 2021		31,940,954 shares
	Number of treasury shares at the end of the period
		As of December 31, 2021	4,865,824	shares	As of March 31, 2021		1,951,827 shares
	Average number of shares during the period (cumulative from the beginning of the fiscal year)
		Nine months ended December 31, 2021	33,242,695	shares	Nine months ended December 31, 2020	30,443,164 shares

Note: On December 15, 2021, a share exchange was conducted resulting in the Company becoming the wholly owning parent company in the share exchange and Izumiya Co., Ltd. becoming the wholly owned subsidiary in the share exchange, and a share exchange was conducted resulting in the Company becoming the wholly owning parent company in the share exchange and Hankyu Oasis Co., Ltd. becoming the wholly owned subsidiary in the share exchange, and the Company issued shares of common stock. As a result, total number of issued shares at the end of the period have increased.

• Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
• Proper use of forecasts of financial results, and other special matters (Caution concerning forward-looking statements)
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements do not purport that the Company pledges to realize such statements. Actual performance and other results may differ materially due to various factors.

2

Quarterly consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of March 31, 2021	As of December 31, 2021
Assets
Current assets
Cash and deposits	6,879	17,370
Accounts receivable - trade	1,748	14,235
Merchandise and finished goods	2,454	7,310
Raw materials and supplies	64	170
Short-term loans receivable	-	2,502
Accounts receivable - other	965	6,306
Other	497	2,072
Allowance for doubtful accounts	-	(83)
Total current assets	12,610	49,886
Non-current assets
Property, plant and equipment
Buildings and structures, net	9,837	31,357
Machinery, equipment and vehicles, net	231	1,063
Land	21,072	35,557
Construction in progress	-	101
Other, net	2,391	4,419
Total property, plant and equipment	33,533	72,499
Intangible assets
Goodwill	-	2,324
Other	439	1,619
Total intangible assets	439	3,943
Investments and other assets
Investment securities	1,755	1,179
Long-term loans receivable	-	3,133
Guarantee deposits	4,374	12,902
Retirement benefit asset	970	1,226
Deferred tax assets	980	4,395
Other	55	657
Allowance for doubtful accounts	-	(6)
Total investments and other assets	8,137	23,488
Total non-current assets	42,109	99,931
Total assets	54,720	149,817

3

			(Millions of yen)
		As of March 31, 2021	As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade	7,585	33,898
Current portion of long-term borrowings	1,204	1,168
Accounts payable - other	2,666	14,978
Lease obligations	426	972
Income taxes payable	631	865
Advances received	82	1,923
Provision for bonuses	1,026	832
Other	1,653	12,893
Total current liabilities	15,277	67,532
Non-current liabilities
Long-term borrowings	1,314	1,199
Provision for retirement benefits for directors (and other	-	49
officers)
Retirement benefit liability	876	4,350
Long-term accounts payable - other	6	79
Lease obligations	622	10,599
Long-term guarantee deposits	1,499	3,865
Asset retirement obligations	517	2,208
Other	10	137
Total non-current liabilities	4,846	22,490
Total liabilities	20,124	90,023
Net assets
Shareholders' equity
Share capital	9,862	9,862
Capital surplus	10,906	54,671
Retained earnings	15,551	2,916
Treasury shares	(1,860)	(7,383)
Total shareholders' equity	34,460	60,066
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	253	-
Revaluation reserve for land	-	(479)
Remeasurements of defined benefit plans	(117)	208
Total accumulated other comprehensive income	135	(271)
Total net assets	34,595	59,794
Total liabilities and net assets	54,720	149,817

4

Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

			(Millions of yen)
		Nine months ended	Nine months ended
		December 31, 2020	December 31, 2021
Net sales	99,316	192,788
Cost of sales	73,987	130,134
Gross profit	25,329	62,653
Selling, general and administrative expenses	22,651	58,626
Operating profit	2,677	4,027
Non-operating income
Interest income	4	17
Dividend income	21	0
Share of profit of entities accounted for using equity method	6	-
Other	279	133
Total non-operating income	312	151
Non-operating expenses
Interest expenses	16	284
Contributions for group operations	-	404
Other	15	123
Total non-operating expenses	32	813
Ordinary profit	2,957	3,365
Extraordinary income
Gain on sale of non-current assets	-	164
Gain on sale of investment securities	4	-
Gain on bargain purchase	-	231
Total extraordinary income	4	396
Extraordinary losses
Loss on sale and retirement of non-current assets	16	88
Loss on closing stores and others	-	12
Impairment losses	-	80
Provision for loss on store closings	1	-
Total extraordinary losses	17	181
Profit before income taxes	2,945	3,581
Income taxes - current	678	617
Income taxes - deferred	292	44
Total income taxes	971	661
Profit	1,973	2,919
Profit attributable to non-controlling interests	-	-
Profit attributable to owners of parent	1,973	2,919

5