Kantsu : Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 28, 2022(Nine Months Ended November 30, 2021)

January 14, 2022

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Yes

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		January 14, 2022
	Non-consolidated Financial Results
	for the Third Quarter of the Fiscal Year Ending February 28, 2022
	(Nine Months Ended November 30, 2021)
		[Japanese GAAP]
Company name:	KANTSU CO., LTD.	Listing: Tokyo Stock Exchange (Mothers)
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:

Scheduled date of payment of dividend:

Preparation of supplementary materials for quarterly financial results:

Holding of quarterly financial results meeting:

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

1. Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 28, 2022 (March 1, 2021 - November 30, 2021)

(1) Results of operations						(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit
	Million yen	%		Million yen	%	Million yen	%	Million yen	%
Nine months ended Nov. 30, 2021	7,567	11.6		559	165.5	530	186.9	365	171.9
Nine months ended Nov. 30, 2020	6,779	27.4		210	19.3	184	19.8	134	28.7
	Net income per share	Diluted net income per
				share
		Yen			Yen
Nine months ended Nov. 30, 2021		36.15			34.77
Nine months ended Nov. 30, 2020		15.28			14.30

Note: KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. Net income per share and diluted net income per share have been calculated as if this stock split had taken place at the beginning of the fiscal year ended February 28, 2021.

(2) Financial position

	Total assets	Net assets	Equity ratio
	Million yen		Million yen	%
As of Nov. 30, 2021	8,550		2,628	30.7
As of Feb. 28, 2021	7,532		1,595	21.1
Reference: Shareholders' equity	As of Nov. 30, 2021: 2,628 million yen	As of Feb. 28, 2021: 1,591 million yen

2. Dividends

			Dividends per share
	1Q-end	2Q-end	3Q-end	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
FY2/21	-	0.00	-	0.00	0.00
FY2/22	-	0.00	-
FY2/22 (forecast)				0.00	0.00

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

3. Earnings Forecast for the Fiscal Year Ending February 28, 2022 (March 1, 2021 - February 28, 2022)

(Percentages represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit		Net income per share
	Million yen		%	Million yen	%	Million yen	%	Million yen		%	Yen
Full year	10,756		12.9	670	60.4	635	65.7	428		51.5	42.27

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

2. KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. The net income per share forecast for the fiscal year ending February 28, 2022 is adjusted to reflect the stock split.

* Notes

1. Application of special accounting methods for presenting quarterly non-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:	None
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting-based estimates:	None
4)	Restatements:	None

(3) Number of outstanding shares (common shares)

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

As of Nov. 30, 2021:	10,262,400 shares	As of Feb. 28, 2021:	9,546,000 shares
2) Number of treasury shares at the end of the period
As of Nov. 30, 2021:	93 shares	As of Feb. 28, 2021:	- shares
3) Average number of shares outstanding during the period
Nine months ended Nov. 30, 2021:	10,108,156 shares	Nine months ended Nov. 30, 2020:	8,792,175 shares

Note: KANTSU conducted a 3-for-1 common stock split effective on September 1, 2021. The number of shares outstanding at the end of the period (including treasury shares), the number of treasury shares at the end of the period and 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, 2021.

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 4 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 b e available on KANTSU's website (https://www.kantsu.com/ir/) on January 14, 2022.

KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22

Contents of Attachments

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

1

Revised reportable segments

Reportable segment

Logistics services business

IT automation business

Previous reportable segments

Reportable segment

Logistics services business

KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22

1. Qualitative Information on Quarterly Non-consolidated Financial Performance

Forward-looking statements are based on the judgments of KANTSU as of November 30, 2021.

(1) Explanation of Results of Operations

During the first nine months of the current fiscal year (March 1 to November 30, 2021), the Japanese government began to ease restrictions on various activities because of signs of a decline in the number of COVID-19 cases that started around September. However, the outlook for the economy is still uncertain because of worries about the risk of another wave of infections.

In the logistics sector, the business climate remains challenging as the pandemic continues along with worries about the possibility of another wave of infections. Teleworking with some limitations is now firmly established at many companies and companies are increasing the use of the internet to sell products and ser vices. All of these trends continued during the third quarter of the current fiscal year.

To meet this demand, we continued to add and expand distribution centers for establishing an infrastructure for receiving orders from new customers. We also increased search engine optimization (SEO) measures and took other actions for effectively using the internet to start providing services to new customers. The current fiscal year is the first year of the medium-term business plan that ends in February 2024. Based on this plan, there have been many activities to provide services for the growing e -commerce market. Two major strategies for growth are the construction of large refrigerated and frozen warehouses and measures to grow rapidly as an IT vendor.

Due to these activities, sales increased 11.6% year-on-year to 7,567 million yen, operating profit increased 165.5% to 559 million yen, ordinary profit increased 186.9% to 530 million yen and profit increased 171.9% to 365 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.

In prior years, there was the single reportable segment of logistics services and all other acti vities were categorized as others. Beginning with the first quarter of the fiscal year ending in February 2022, the software sales and use services category which was previously included in the logistic services segment has been separately disclosed in a reportable segment called IT automation. Results of operations in the first nine months of the previous fiscal year have been restated to facilitate direct comparisons with performance in the current fiscal year.

Main Services

EC/catalog logistics support services, Rakuten Super Logistics services, the Cloud Thomas warehouse management system, the Annie check list system, outsourced order processing services and logistics consulting services

Note: In addition to the logistics services business, there was a segment called others for activities not included in this reportable segment. Others was primarily technology education services for foreign trainees and other education services.

Main Services

EC/catalog logistics support services, Rakuten Super Logistics services, outsourced order processing services and logistics consulting services

The Cloud Thomas warehouse management system, the Annie check list system, the e.can system for the automatic processing of orders received and the ippo! service for outsourced robotic process automation (RPA) production

Note: In addition to the above businesses, there is a segment called others for activities not included in these reportable segments. Others is primarily technology education services for foreign trainees and other education services.

2

KANTSU CO., LTD. (9326) Financial Results for the Third Quarter of FY2/22

Logistics services business

To increase customer satisfaction, improvement activities aimed at raising productivity continued with emphasis on EC/catalog logistics support services. Cargo transport sales decreased because of the switch to different contracts with some customers. Sales benefited from activities to receive orders from new customers. Most significant are the April 2021 completion of a new EC/Catalog Distribution Center in the city of Amagasaki in Hyogo prefecture (about 18,500 square meters) and the June 2021 completion of a D-to-C(direct-to-consumer) Distribution Center in Amagasaki (about 17,200 square meters). In addition, we plan to begin operating a refrigerated and frozen warehouse at the EC/Catalog Distribution Center in Amagasaki in January 2022 and the Tokyo Primary Center in the city of Niiza in Saitama prefecture (about 27,400 square meters) in February 2022. To receive orders involving the use of these two centers from new customers, we reinforced SEO and other measures for the effective use of the internet.

As a result, net sales increased 10.0% year-on-year to 7,175 million yen and segment profit increased 285.9% to 466 million yen.

IT automation business

There were strong sales of the Cloud Thomas warehouse management system to new customers . In addition, there were sales of logistics automation hardware associated with new Cloud Thomas users . We also strengthened capabilities for support services, including by increasing the number of support service personnel, to build an even stronger framework for sales activities. Although there was no big change in the number of companies using the Annie check list system, the number of orders increased for the e.can system for the automatic processing of orders received and for the ippo! service for outsourced RPA production.

As a result, net sales increased 69.8% year-on-year to 319 million yen and segment profit increased 2.2% to 99 million yen.

Other businesses

Technology education services for foreign trainees was unable to operate mainly because of the suspension of operations of schools in Myanmar due to the COVID-19 crisis. However, other educational services performed well because the pandemic did not have a significant impact on these activities. As a result, sales, including the service for helping people with developmental disabilities find jobs that was launched in December 2020, were firm.

As a result, net sales increased 7.2% year-on-year to 72 million yen and segment loss was 5 million yen, compared with a loss of 6 million yen one year earlier.

Results by business segment for the first nine months of the fiscal year ending February 28, 2022 (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	7,046,671	93.1	10.3		-
	services
	Outsourced order processing	81,651	1.1	18.3		-
	services
	Others	47,307	0.6	(27.4)		-
Logistics services business	7,175,630	94.8	10.0	466,044	6.5	285.9
IT automation business	319,767	4.2	69.8	99,030	31.0	2.2
Other businesses	72,426	1.0	7.2	(5,774)	-	-
Total for reportable segments	7,567,824	100.0	11.6	559,300	7.4	165.5

Note: Rakuten Super Logistics services are included in EC/catalog logistics support services.

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