Net Marketing : Summary of Non-Consolidated Financial Results for the Fiscal Year Ended June 30, 2022

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 Non-Consolidated Financial Results for the Fiscal Year Ended June 30, 2022

(Based on Japanese Accounting Standards)

	August 10, 2022
Company Name:	Net Marketing Co. Ltd.
Stock Exchange Listing:	Tokyo Stock Exchange
Code Number:	6175
URL:	https://www.net-marketing.co.jp/
Representative:	Kunihisa Miyamoto, Representative Director and CEO
Contact:	Koji Mimura, Director and CFO
(TEL)	[phone]

Scheduled date of ordinary general meeting of shareholders:	September 29, 2022
Scheduled date of the start of dividend payments:	September 30, 2022
Scheduled date to submit annual securities report:	September 29, 2022
Supplementary material for financial results:	Yes
Briefing on financial results:	No

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

1. Financial Results for the Fiscal Year Ended June 30, 2022 (from July 1, 2021 to June 30, 2022)

(1) Financial Results							(Percentages calculated on year-on-year basis.)
	Net sales		Operating income	Ordinary income		Net income
	Million yen		%	Million yen	%	Million yen		%		Million yen		%
Year ended June 30, 2022	5,168		-	404		-		426		-		326		-
Year ended June 30, 2021	14,011		(2.5)	584		(20.5)		592		(20.7)		336		(34.0)
	Net income	Diluted net income		Return on equity	Return on assets	Operating income
	per share		per share		margin
		Yen		Yen			%			%			%
Year ended June 30, 2022	21.82		21.70			10.4			7.5			7.8
Year ended June 30, 2021	22.70		22.40			11.7			11.5			4.2
(Reference) Equity method gain or loss:		Year ended June 30, 2022	- million yen
				Year ended June 30, 2021	- million yen

Because the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29), and other regulations have been applied from the beginning of the fiscal year ended June 30, 2022, year-on-year changes in the aforementioned net sales, operating income, ordinary income and net income are not stated.

(2) Financial Position

		Total assets	Net assets	Ratio of shareholders'	Net assets per share
		equity to total assets
		Million yen	Million yen	%	Yen
As of June 30, 2022		6,096	3,267	53.6	217.48
As of June 30, 2021		5,321	3,012	56.6	201.75
(Reference) Shareholders' equity:		As of June 30, 2022	3,267 million yen
			As of June 30, 2021	3,012 million yen
(3) State of Cash Flows
		Cash flows from	Cash flows from	Cash flows from	Cash and cash
		equivalents at end of
		operating activities	investing activities	financing activities
		period
		Million yen	Million yen	Million yen	Million yen
Year ended June 30, 2022		869	(42)	(71)	4,120
Year ended June 30, 2021		426	(118)	(156)	3,365

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2. Dividends

		Dividends per share			Total dividends	Dividend	Dividend on
	End of 1st	End of 2nd	End of 3rd
		Year end	Annual	paid	payout ratio	equity
	quarter	quarter	quarter
	Yen	Yen	Yen		Yen	Yen	Million yen	%	%
Year ended June 30, 2021	-	0.00	-		6.00	6.00	89	26.4	3.0
Year ended June 30, 2022	-	0.00	-		6.00	6.00	90	27.5	2.8
Year ending June 30, 2023	-	-	-		-	-		-
(forecast)

(Note) As announced in Notice of Tender Offer for Shares of the Company by BCPE Bronze Cayman L.P. and Announcement of Opinion dated August 10, 2022, the Company's stock is scheduled to be delisted through the implementation of the tender offer and the series of subsequent procedures by the offeror. As a result, the dividend forecast for the fiscal year ending June 30, 2023 is not stated.

3. Financial Results Forecasts for the Fiscal Year Ending June 30, 2023 (from July 1, 2022 to June 30, 2023)

As announced in Notice of Tender Offer for Shares of the Company by BCPE Bronze Cayman L.P. and Announcement of Opinion dated August 10, 2022, the Company's stock is scheduled to be delisted through the implementation of the tender offer and the series of subsequent procedures by the offeror. As a result, financial results forecasts for the fiscal year ending June 30, 2023 are not presented.

* NOTE

1. Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements
2. 1. Changes in accounting principles accompanying the amendment of accounting standards: Yes
   2. Changes other than those in (i) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
3. Number of Shares Issued (Common shares)
4. 1. Number of shares issued at the end of the period (including treasury stock)

	As of June 30, 2022:	15,024,800 shares	As of June 30, 2021:	14,934,800 shares
(ii)	Number of treasury stock at the end of the period
	As of June 30, 2022:	188 shares	As of June 30, 2021:	188 shares
(iii)	Average number of shares issued during the period
	Year ended June 30, 2022:	14,957,445 shares	Year ended June 30, 2021:	14,831,528 shares

• The summaries of financial results are positioned outside the scope of the audit performed by a certified public accountant or an audit corporation.
• Explanations Regarding the Appropriate Use of Financial Results Forecasts and Other Items Worthy of Special Mention Forward-Looking Statements>
  As announced in Notice of Tender Offer for Shares of the Company by BCPE Bronze Cayman L.P. and Announcement of Opinion dated August 10, 2022, the Company's stock is scheduled to be delisted through the implementation of the tender offer and the series of subsequent procedures by the offeror. As a result, financial results forecasts for the fiscal year ending June 30, 2023 are not presented.
  The Company will publish supplementary materials for explaining the financial results through the Company Announcements Disclosure Service of the Tokyo Stock Exchange and on its official website on Wednesday, August 10, 2022.

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Financial Statements

(1) Balance Sheets

					(Unit: Thousand yen)
			Previous fiscal year		Fiscal year under review
			(As of June 30, 2021)		(As of June 30, 2022)
	Assets
	Current assets
	Cash and deposits		3,365,770		4,120,490
	Accounts receivable - trade		1,297,360		1,291,131
	Supplies		159		140
	Advance payments - trade	8,259	7,813
	Prepaid expenses		136,545		155,077
	Other	993	2,488
	Allowance for doubtful accounts		(10)		(10)
	Total current assets	4,809,080	5,577,131
	Non-current assets
	Property, plant and equipment
	Buildings		93,952		93,952
	Tools, furniture and fixtures	88,119	92,428
	Accumulated depreciation		(82,618)		(100,038)
	Total property, plant and equipment	99,453	86,342
	Intangible assets
	Goodwill		18,396		7,884
	Software		11,434		50,499
	Other		83,977		80,202
	Total intangible assets		113,808		138,586
	Investments and other assets
	Long-term prepaid expenses		31		699
	Deferred tax assets	34,407	32,048
	Leasehold and guarantee deposits		265,109		261,842
	Total investments and other assets	299,548	294,590
	Total non-current assets		512,810		519,519
	Total assets	5,321,891	6,096,650

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					(Unit: Thousand yen)
			Previous fiscal year		Fiscal year under review
			(As of June 30, 2021)		(As of June 30, 2022)
	Liabilities
	Current liabilities
	Accounts payable - trade		1,560,138		2,022,979
	Accounts payable - other	331,765	344,083
	Accrued expenses		2,412		3,204
	Income taxes payable	32,759	95,089
	Advances received		292,226		317,860
	Deposits received	46,394	6,706
	Other		43,207		39,174
	Total current liabilities	2,308,904	2,829,098
	Total liabilities		2,308,904		2,829,098
	Net assets
	Shareholders' equity
	Capital stock	414,539	423,439
	Capital surplus
	Legal capital surplus	404,539	413,439
	Total capital surplus		404,539		413,439
	Retained earnings
	Other retained earnings
	Retained earnings brought forward	2,194,043	2,430,808
	Total retained earnings		2,194,043		2,430,808
	Treasury shares	(135)	(135)
	Total shareholders' equity		3,012,986		3,267,551
	Share acquisition rights		-		-
	Total net assets		3,012,986		3,267,551
	Total liabilities and net assets	5,321,891	6,096,650

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(2) Statement of Income

					(Unit: Thousand yen)
			Previous fiscal year		Fiscal year under review
			(From July 1, 2020		(From July 1, 2021
			to June 30, 2021)		to June 30, 2022)
	Net sales		14,011,332		5,168,133
	Cost of sales	9,489,351	1,261,643
	Gross profit		4,521,981		3,906,489
	Selling, general and administrative expenses	3,937,729	3,502,293
	Operating income		584,251		404,196
	Non-operating income
	Interest income		32		33
	Rewards income	1,731	2,878
	Subsidy income		6,630		-
	Insurance claim income		-	18,460
	Other		338		1,860
	Total non-operating income	8,731	23,233
	Non-operating expenses
	Interest expenses	213		-
	Foreign exchange losses		112		579
	Other	3	0
	Total non-operating expenses		329		579
	Ordinary income	592,653	426,850
	Extraordinary income
	Gain on reversal of share acquisition rights	300		-
	Insurance claim income		-		100,000
	Total extraordinary income	300	100,000
	Extraordinary losses
	Information security expenses	96,011	45,660
	Total extraordinary losses		96,011		45,660
	Net income before income taxes	496,942	481,190
	Income taxes - current		136,378		152,457
	Income taxes - deferred	23,944	2,359
	Total income taxes		160,322		154,817
	Net income	336,619	326,372

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