MarkLines : Consolidated Financial Results for the Three Months Ended March 31,2021

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 Three Months Ended March 31, 2021

[Japanese GAAP]

Company name: MarkLines Co., Ltd.	May 06, 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: May 12, 2021

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: No

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

1. Consolidated Financial Results for the Three Months Ended March 31, 2021 (January 01, 2021 to March 31, 2021)

(1) Consolidated Operating Results			(% indicates changes from the previous corresponding period.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Three months ended	Million yen		%	Million yen	%	Million yen	%	Million yen	%
March 31, 2021	979		37.0	327	29.0	332	29.9	218	92.5
March 31, 2020	715		15.6	254	12.2	255	11.8	113	(29.2)

(Note) Comprehensive income:	Three months ended March 31, 2021:
	Three months ended March 31, 2020:

¥	269 million	[	108.0%]
¥	129 million	[	(21.5) %]

	Basic earnings		Diluted earnings per
	per share		share
Three months ended		Yen	Yen
March 31, 2021		16.53	16.49
March 31, 2020		8.60	8.57

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio
As of	Million yen		Million yen	%
March 31, 2021	4,143		2,938	70.3
December 31, 2020	4,024		2,920	72.6
(Reference) Equity: As of	March 31, 2021:	¥	2,914 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		-
Fiscal year ending December 31, 2021				0.00	-		21.00	21.00
(Forecast)
(Note) Revision to the forecast for dividends	announced most	recently:	No
(Note) Breakdown of the 1st 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	Basic earnings
				to owners of parent	per share
Six months ended June 30,		Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
	1,500		14.6	540	20.4	520	15.8	360	29.8	27.30
2021
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 three months ended March 31, 2021
(changes in specified subsidiaries resulting in changes in scope of consolidation):	Yes
New	１	(Company name:								)
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):

March 31, 2021:	13,191,200	shares
December 31, 2020:	13,189,200	shares
2) Total number of treasury shares at the end of the period:
March 31, 2021:	297	shares
December 31, 2020:	297	shares

3) Average number of shares during the period:
Three months ended March 31, 2021:	13,190,769	shares
Three months ended March 31, 2020:	13,180,254	shares

Quarterly Consolidated Financial Statements

Quarterly Consolidated Balance Sheets

				(Thousand yen)
			As of December 31,2020	As of March 31,2021
Assets
	Current assets
		Cash and deposits	3,301,979	3,191,817
		Accounts receivable - trade	131,811	364,201
		Merchandise	9,956	4,905
		Work in process	-	2,300
		Prepaid expenses	22,998	26,071
		Other	45,854	24,506
		Allowance for doubtful accounts	(1,450)	(3,755)
		Total current assets	3,511,150	3,610,046
	Non-current assets
		Property, plant and equipment
		Buildings and structures	54,938	55,176
		Accumulated depreciation	(12,353)	(13,153)
		Buildings and structures, net	42,585	42,023
		Land	5,634	5,634
		Other	39,173	42,921
		Accumulated depreciation	(27,632)	(29,433)
		Other, net	11,540	13,487
		Total property, plant and equipment	59,760	61,145
		Intangible assets
		Software	64,447	56,469
		Total intangible assets	64,447	56,469
		Investments and other assets
		Investment securities	194,307	224,447
		Long-term time deposits	47,430	50,370
		Leasehold deposits	99,239	99,002
		Deferred tax assets	45,153	39,169
		Other	4,451	4,487
		Allowance for doubtful accounts	(1,067)	(1,430)
		Total investments and other assets	389,513	416,046
		Total non-current assets	513,721	533,662
	Total assets	4,024,872	4,143,708

				(Thousand yen)
			As of December 31,2020	As of March 31,2021
Liabilities
	Current liabilities
		Accounts payable - trade	42,707	128,241
		Accounts payable - other	8,230	11,622
		Accrued expenses	43,812	30,423
		Income taxes payable	169,853	104,232
		Accrued consumption taxes	38,446	44,977
		Advances received	764,267	815,902
		Deposits received	19,764	14,735
		Provision for bonuses	12,671	46,270
		Other	-	2,407
		Total current liabilities	1,099,752	1,198,813
	Non-current liabilities
		Retirement benefit liability	4,435	6,540
		Total non-current liabilities	4,435	6,540
	Total liabilities	1,104,187	1,205,354
Net assets
	Shareholders' equity
		Share capital	368,751	368,951
		Capital surplus	286,558	286,758
		Retained earnings	2,306,972	2,248,089
		Treasury shares	(344)	(344)
		Total shareholders' equity	2,961,938	2,903,455
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	(38,003)	4,136
		securities
		Foreign currency translation adjustment	(3,250)	7,102
		Total accumulated other comprehensive income	(41,254)	11,239
	Non-controlling interests	-	23,660
	Total net assets	2,920,684	2,938,354
Total liabilities and net assets	4,024,872	4,143,708

Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the three months)
		(Thousand yen)
	For the three months	For the three months
	ended March 31,2020	ended March 31,2021
Net sales	715,023	979,444
Cost of sales	257,077	415,881
Gross profit	457,945	563,562
Selling, general and administrative expenses
Promotion expenses	5,628	5,695
Sales commission	301	346
Advertising expenses	2,327	2,768
Remuneration for directors (and other officers)	14,266	14,339
Salaries and allowances	76,664	87,028
Provision for bonuses	15,333	19,558
Retirement benefit expenses	2,234	2,225
Legal welfare expenses	13,894	17,094
Depreciation	4,848	3,166
Provision of allowance for doubtful accounts	2,067	2,667
Rent expenses	10,745	16,641
Other	55,613	64,451
Total selling, general and administrative expenses	203,927	235,984
Operating profit	254,018	327,578
Non-operating income
Interest income	457	873
Dividend income	2,234	1,223
Foreign exchange gains	-	2,286
Other	1,141	417
Total non-operating income	3,833	4,800
Non-operating expenses
Foreign exchange losses	1,943	-
Other	0	-
Total non-operating expenses	1,943	-
Ordinary profit	255,907	332,378
Extraordinary losses
Loss on valuation of investment securities	105,896	30,598
Total extraordinary losses	105,896	30,598
Profit before income taxes	150,011	301,779
Income taxes - current	73,838	97,650
Income taxes - deferred	(37,120)	(12,614)
Total income taxes	36,717	85,036
Profit	113,294	216,743
Loss attributable to non-controlling interests	-	(1,339)
Profit attributable to owners of parent	113,294	218,083

Quarterly Consolidated Statements of Comprehensive Income (For the three months)

			(Thousand yen)
		For the three months	For the three months
		ended March 31,2020	ended March 31,2021
Profit	113,294	216,743
Other comprehensive income
	Valuation difference on available-for-sale securities	21,471	42,140
	Foreign currency translation adjustment	(5,321)	10,353
	Total other comprehensive income	16,150	52,493
Comprehensive income	129,444	269,237
Comprehensive income attributable to
	Comprehensive income attributable to owners of	129,444	270,577
	parent
	Comprehensive income attributable to non-controlling	-	(1,339)
	interests