Kantsu : Consolidated Financial Results for the First Quarter of the Fiscal Year Ending February 28, 2023 (Three Months Ended May 31, 2022)

		July 14, 2022
	Consolidated Financial Results
	for the First Quarter of the Fiscal Year Ending February 28, 2023
	(Three Months Ended May 31, 2022)
		[Japanese GAAP]
Company name:	KANTSU CO., LTD.	Listing: Tokyo Stock Exchange
Securities code:	9326	URL: https://www.kantsu.com/
Representative:	Hisahiro Tatsushiro, Representative Director and President
Contact:	Tadashi Katayama, Managing Director	Tel: [phone]

Scheduled date of filing of Quarterly Report:	July 14, 2022
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for quarterly financial results:	Yes
Holding of quarterly financial results meeting:	None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending February 28, 2023 (March 1, 2022 - May 31, 2022)

(1) Consolidated results of operations						(Percentages represent year-on-year changes)
	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
	Million yen	%		Million yen		%	Million yen		%	Million yen		%
Three months ended May 31, 2022	2,571	-		132		-	123		-	76		-
Three months ended May 31, 2021	-	-		-		-	-		-	-		-
Note: Comprehensive income	Three months ended May 31, 2022:	76 million yen (-%)
	Three months ended May 31, 2021: - million yen (-%)
	Net income per share	Diluted net income per
				share
		Yen			Yen
Three months ended May 31, 2022		7.46	7.20
Three months ended May 31, 2021		-				-

Note: Figures for the three months ended May 31, 2021 and year-on-year changes are not presented because KANTSU began to prepare the quarterly consolidated financial statements from the first quarter of the fiscal year ending February 28, 2023.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of May 31, 2022	9,442	2,705	28.7
As of Feb. 28, 2022	-	-	-

Reference: Shareholders' equityAs of May 31, 2022: 2,705 million yen As of Feb. 28, 2022: - million yen

Note: Figures as of February 28, 2022 are not presented because KANTSU began to prepare the quarterly consolidated financial statements from the first quarter of the fiscal year ending February 28, 2023.

2. Dividends

				Dividends per share
	1Q-end		2Q-end	3Q-end	Year-end	Total
		Yen	Yen	Yen	Yen	Yen
FY2/22		-	0.00	-	10.00	10.00
FY2/23		-
FY2/23 (forecast)			0.00	-	10.00	10.00

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

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2023 (March 1, 2022 - February 28, 2023)

(Percentages represent year-on-year changes)

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Net income per share
				owners of parent
	Million yen		%	Million yen		%	Million yen		%	Million yen		%	Yen
First half	5,516		-	311		-	290		-	196		-	19.11
Full year	12,002		-	943		-	902		-	608		-	59.32

Notes: 1. Revision to the most recently announced consolidated forecast: None

2. Year-on-year changes are not presented because KANTSU began to prepare the quarterly consolidated financial statements from the first quarter of the fiscal year ending February 28, 2023.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): Yes

Newly added: 1 (KANTSU Business Services Co., Ltd.)

Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
2. Changes in accounting policies and accounting-based estimates, and restatements

1)	Changes in accounting policies due to revisions in accounting standards, others:	Yes
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting-based estimates:	None
4)	Restatements:	None

(4) Number of outstanding shares (common shares)

1) Number of shares outstanding at the end of the period (including treasury shares)

As of May 31, 2022:	10,269,900 shares	As of Feb. 28, 2022:	10,262,400 shares
2) Number of treasury shares at the end of the period
As of May 31, 2022:	93 shares	As of Feb. 28, 2022:	93 shares
3) Average number of shares outstanding during the period
Three months ended May 31, 2022:	10,264,182 shares	Three months ended May 31, 2021:	9,891,141 shares

Note: KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. The average number of shares outstanding during the period have been calculated as if this stock split had taken place at the beginning of the fiscal year ended February 28, 2022.

The current financial report is not subject to quarterly review by certified public accountants or auditing firms.

Explanation of appropriate use of earnings forecasts, and other special items

Cautionary statement with respect to forward-looking statements

Earnings forecasts and other forward-looking statements in this document are based on information that was available when this information was announced and on assumptions as of the announcement date concerning uncertainties that may affect results of operations in the future. Consequently, these statements are not promises by KANTSU regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to "1. Qualitative Information on Quarterly Non-consolidated Financial Performance, (3) Explanation of Non -consolidated Forecast and Other Forward-looking Statements" on page 3 for forecast assumptions and notes of caution for usage.

How to view supplementary information materials for financial results

The supplementary information materials for financial results will be available on KANTSU's website (https://www.kantsu.com/ir/) on July 14, 2022.

KANTSU CO., LTD. (9326) Financial Results for the First Quarter of FY2/23

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Forecast and Other Forward-looking Statements	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	5
	Quarterly Consolidated Statement of Income	5
	For the Three-month Period
	Quarterly Consolidated Statement of Comprehensive Income	6
	For the Three-month Period
(3)	Notes to Quarterly Consolidated Financial Statements	7
	Going Concern Assumption	7
	Significant Changes in Shareholders' Equity	7
	Changes in Significant Subsidiaries During the Period	7
	Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements	7
	Changes in Accounting Policies	7
	Segment and Other Information	8

1

KANTSU CO., LTD. (9326) Financial Results for the First Quarter of FY2/23

1. Qualitative Information on Quarterly Consolidated Financial Performance

Forward-looking statements are based on the judgments of KANTSU as of May 31, 2022.

Furthermore, KANTSU established KANTSU Business Services Co., Ltd. as a wholly owned subsidiary on March 1, 2022, and began preparing quarterly consolidated financial statements from the first quarter of the current fiscal year. Therefore, we have not presented year-on-year comparisons with the same period of the previous fiscal year or with the end of the previous consolidated fiscal year.

(1) Explanation of Results of Operations

During the first quarter of the current fiscal year (March 1 to May 31, 202 2) the Japanese economy showed signs of normalization of socio-economic activities despite the lingering effects of COVID-19 pandemic. Nevertheless, the economic outlook remained uncertain due to a sharp rise in the prices of resources and raw materials caus ed by the tense situation in Ukraine and the sharp depreciation of the yen.

To continue increasing corporate value, the KANTSU Group started a revised medium-term business plan as was announced on April 14, 2022 titled "Notice of Ro lling of Medium-term Business Plan (Japanese version only)." There are two goals in the logistics services business. First is the addition of more distribution centers for the growth of this business. Second is more investments in facilities for the distribution of frozen mercha ndise to become Japan's leader in the frozen EC logistics sector. In the IT automation business, the goal is to increase activities to receive orders from new customers. By focusing on these strategic initiatives for growth, we are determined to achieve the sustained growth of sales and earnings in both businesses.

Due to these activities, sales were 2,571 million yen, operating profit was 132 million yen, ordinary profit was 123 million yen and Profit attributable to owners of parent increased was 76 million yen.

Business segment performance was as follows.

Business segment sales are sales to external customers and segment profit or loss is based on operating profit in the quarterly income statement.

Logistics services business

To increase customer satisfaction, improvement activities aimed at raising quality and productivity continued with emphasis on EC/catalog logistics support services. On the other hand, to receive orders from new customers through distribution centers such as the Tokyo Primary Center in the city of Niiza in Saitama prefecture (about 27,400 square meters) that was established in February 2022, we reinforced SEO and other measures for the effective use of the internet. In addition, there were many activities to increase the percentage of customer contacts that result in orders. Most significant is measures for increasing opportunities to explain our m any activities for providing outstanding services. One example is providing our customers with guided tours of our Head Office showroom (Amagasaki, Hyogo Prefecture), which was completed in February 2022.

As a result, net sales were to 2,437 million yen and segment profit was 99 million yen.

IT automation business

There were strong sales of the Cloud Thomas warehouse management system and the Cloud Thomas Pro warehouse management system to new customers. Furthermore, the Group entered into a capital and business alliance with Canon IT Solutions Inc. in April 2022 for joint promotional activities to win new proje cts.

As a result, net sales were 107 million yen and segment profit was 33 million yen.

Other businesses

In other businesses segment, sales from after-school day services for children with disabilities, and support services for people with disabilities to change jobs, were steady.

As a result, net sales were 27 million yen and segment profit was 67 thousand yen.

2

KANTSU CO., LTD. (9326) Financial Results for the First Quarter of FY2/23

Results by business segment for the first quarter of the fiscal year ending February 28, 2023

						(Thousands of yen)
	Segment		Net sales		Segment profit (loss) (operating profit (loss))
				YoY change		Operating	YoY change
	Services	Amount	Comp. (%)	Amount	profit on net
	(%)	(%)
					sales (%)
	EC/catalog logistics support	2,385,851	92.8	-		-
	services
	Outsourced order processing	29,870	1.2	-		-
	services
	Others	21,397	0.8	-		-
Logistics services business	2,437,119	94.8	-	99,301	4.1	-
IT automation business	107,224	4.2	-	33,341	31.1	-
Other businesses	27,422	1.1	-	67	0.2	-
Total for reportable segments	2,571,766	100.0	-	132,711	5.2	-

Note: Year-on-year changes are not presented because KANTSU began to prepare the quarterly consolidated financial statements from the first quarter of the fiscal year ending February 28, 2023.

(2) Explanation of Financial Position

Total assets at the end of the first quarter were 9,442 million yen. Liabilities were 6,737 million yen and net assets were 2,705 million yen.

The major changes are as follows.

Current assets

Current assets were 4,177 million yen. This was attributable primarily to 2,682 million yen in cash and deposits, 204 million yen in electronically recorded monetary claims-operating and 924 million yen in accounts receivable-trade.

Non-current assets

Non-current assets were 5,265 million yen. This was attributable primarily to 1,547 million yen in buildings, 1,125 million yen in land and 899 million yen in leasehold and guarantee deposits.

Current liabilities

Current liabilities were 1,669 million yen. This was attributable mainly to 323 million yen in accounts payable-trade and 863 million yen in current portion of long-term borrowings.

Non-current liabilities

Non-current liabilities were 5,067 million yen. This was attributable mainly to 4,276 million yen in long-term borrowings.

Net assets

Net assets were 2,705 million yen. Share capital was 787 million yen, the capital surplus was 773 million yen and retained earnings were 1,144 million yen.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

KANTSU maintains consolidated forecasts for the fiscal year ending February 28, 2023 that were announced on April 14, 2022 in the press release titled "Notice of Consolidated Forecast and Start of Consolidated Financial Reports."

Forecasts of future performance in this report are based on assumptions judged to be valid and information available to the KANTSU's management at the time the materials were prepared. Actual results may differ substantially from these forecasts for a number of reasons.

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