MarkLines : Consolidated Financial Results for the Six Months Ended June 30, 2021

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 Six Months Ended June 30, 2021

[Japanese GAAP]

Company name: MarkLines Co., Ltd.	August 04, 2021
Stock exchange listing: Tokyo
Code number: 3901
URL: https://www.marklines.com
Representative: Makoto Sakai	President, CEO
Contact: Kenichi Sakai	Director, General Manager, Administration Dept.
Phone: [phone]

Scheduled date of filing quarterly securities report: August 04, 2021

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes

(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Six Months Ended June 30, 2021 (January 01, 2021 to June 30, 2021)

(1) Consolidated Operating Results			(% indicates changes from the previous corresponding period.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Six months ended	Million yen		%	Million yen	%	Million yen	%	Million yen	%
June 30, 2021	1,696		29.6	575	28.4	582	29.7	393	41.8
June 30, 2020	1,308		9.1	448	2.3	449	1.6	277	(11.0)

(Note) Comprehensive income:	Six months ended June 30, 2021:
	Six months ended June 30, 2020:

¥	450 million	[	62.3%]
¥	277 million	[	(8.6) %]

	Basic earnings		Diluted earnings per
	per share		share
Six months ended		Yen	Yen
June 30, 2021		29.81	29.74
June 30, 2020		21.03	20.97

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio
As of	Million yen		Million yen	%
June 30, 2021	4,428		3,123	70.0
December 31, 2020	4,024		2,920	72.6
(Reference) Equity: As of	June 30, 2021:	¥	3,100 million
As of	December 31, 2020:	¥	2,920 million

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, 2020		-		0.00	-		21.00	21.00
Fiscal year ending December 31, 2021		-		0.00
Fiscal year ending December 31, 2021					-		21.00	21.00
(Forecast)
(Note) Revision to the forecast for dividends	announced most	recently:	No
(Note) Breakdown of the 2nd quarter dividend for the fiscal year ending December 31, 2021 :
Commemorative dividend	-	yen
Special dividend	-	yen

3. Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2021(January 01, 2021 to December 31, 2021) (% indicates changes from the previous corresponding period.)

			Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
				owners of parent		per share
			Million yen		%	Million yen	%	Million yen	%	Million yen	%		Yen
Full year			3,100		16.4	1,100	14.5	1,050	9.7	730	15.8		55.35
(Note) Revision to the financial results forecast announced most recently:	No
* Notes:
(1) Changes in significant subsidiaries during the six months ended June 30, 2021
(changes in specified subsidiaries resulting in changes in scope of consolidation):	Yes
New	1	(Company name: Automotive Industry Support Fund 2021 Investment Limited Partnership	)
Exclusion:	-	(Company name:									)
(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):

June 30, 2021:	13,209,200	shares
December 31, 2020:	13,189,200	shares
2) Total number of treasury shares at the end of the period:
June 30, 2021:	351	shares
December 31, 2020:	297	shares

3) Average number of shares during the period:
Six months ended June 30, 2021:	13,193,109	shares
Six months ended June 30, 2020:	13,182,931	shares

Quarterly Consolidated Financial Statements

Quarterly Consolidated Balance Sheets

				(Thousand yen)
			As of December 31,2020	As of June 30,2021
Assets
	Current assets
		Cash and deposits	3,301,979	3,778,908
		Accounts receivable - trade	131,811	111,591
		Merchandise	9,956	8,823
		Prepaid expenses	22,998	23,383
		Other	45,854	12,878
		Allowance for doubtful accounts	(1,450)	(1,238)
		Total current assets	3,511,150	3,934,347
	Non-current assets
		Property, plant and equipment
		Buildings and structures	54,938	26,375
		Accumulated depreciation	(12,353)	(4,994)
		Buildings and structures, net	42,585	21,381
		Land	5,634	-
		Other	39,173	43,000
		Accumulated depreciation	(27,632)	(30,296)
		Other, net	11,540	12,704
		Total property, plant and equipment	59,760	34,085
		Intangible assets
		Software	64,447	49,180
		Total intangible assets	64,447	49,180
		Investments and other assets
		Investment securities	194,307	228,411
		Distressed receivables	1,067	753
		Long-term prepaid expenses	3,383	2,624
		Long-term time deposits	47,430	51,330
		Leasehold deposits	99,239	99,721
		Deferred tax assets	45,153	28,567
		Allowance for doubtful accounts	(1,067)	(753)
		Total investments and other assets	389,513	410,656
		Total non-current assets	513,721	493,922
	Total assets	4,024,872	4,428,270

				(Thousand yen)
			As of December 31,2020	As of June 30,2021
Liabilities
	Current liabilities
		Accounts payable - trade	42,707	32,086
		Accounts payable - other	8,230	5,088
		Accrued expenses	43,812	39,835
		Income taxes payable	169,853	176,962
		Accrued consumption taxes	38,446	38,949
		Advances received	764,267	965,847
		Deposits received	19,764	21,661
		Provision for bonuses	12,671	19,196
		Other	-	855
		Total current liabilities	1,099,752	1,300,482
	Non-current liabilities
		Retirement benefit liability	4,435	4,332
		Total non-current liabilities	4,435	4,332
	Total liabilities	1,104,187	1,304,814
Net assets
	Shareholders' equity
		Share capital	368,751	370,751
		Capital surplus	286,558	288,558
		Retained earnings	2,306,972	2,423,323
		Treasury shares	(344)	(509)
		Total shareholders' equity	2,961,938	3,082,124
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	(38,003)	9,665
		securities
		Foreign currency translation adjustment	(3,250)	8,583
		Total accumulated other comprehensive income	(41,254)	18,249
	Non-controlling interests	-	23,081
	Total net assets	2,920,684	3,123,455
Total liabilities and net assets	4,024,872	4,428,270

Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income (For the six months)

		(Thousand yen)
	For the six months	For the six months
	ended June 30,2020	ended June 30,2021
Net sales	1,308,623	1,696,328
Cost of sales	453,034	648,336
Gross profit	855,588	1,047,991
Selling, general and administrative expenses
Promotion expenses	5,829	6,048
Sales commission	619	639
Advertising expenses	5,324	5,657
Remuneration for directors (and other officers)	28,636	28,523
Salaries and allowances	183,292	220,008
Provision for bonuses	8,427	11,417
Retirement benefit expenses	4,187	3,698
Legal welfare expenses	28,589	37,082
Depreciation	8,297	6,377
Provision of allowance for doubtful accounts	1,705	205
Rent expenses	25,871	33,404
Other	106,460	119,240
Total selling, general and administrative expenses	407,244	472,304
Operating profit	448,344	575,687
Non-operating income
Interest income	943	1,904
Dividend income	2,610	1,623
Foreign exchange gains	-	2,283
Other	1,895	1,041
Total non-operating income	5,449	6,852
Non-operating expenses
Foreign exchange losses	4,687	-
Other	8	64
Total non-operating expenses	4,696	64
Ordinary profit	449,097	582,475
Extraordinary income
Gain on sales of non-current assets	-	11,043
Total extraordinary income	-	11,043
Extraordinary losses
Loss on valuation of investment securities	65,546	34,603
Total extraordinary losses	65,546	34,603
Profit before income taxes	383,550	558,914
Income taxes - current	120,547	171,968
Income taxes - deferred	(14,296)	(4,452)
Total income taxes	106,251	167,515
Profit	277,299	391,399
Loss attributable to non-controlling interests	-	(1,918)
Profit attributable to owners of parent	277,299	393,317