TAC : Consolidated Financial Results for the Six Months Ended September 30, 2022

TAC Co.,Ltd Consolidated Financial Results for the Six Months Ended September 30, 2022

Consolidated Financial Results

for the Six Months Ended September 30, 2022

November 7 , 2022

Company name: TAC Co., Ltd.

Listing: Tokyo Stock Exchange

Company code number: 4319

URL: https://www.tac-school.co.jp

Representative: Toshio Tada, Representative Director

Contact: Shoji Nonaka, Manager of IR department Tel: [phone]

Scheduled date to commence dividend payments: December 5, 2022

Scheduled date to submit the annual securities report of the 2nd quarter: November 11, 2022

Supplemental information for financial statements: Yes

Results briefing session: Yes (for investors and analysts)

(Amounts rounded down to the nearest million yen)

1. Consolidated 2nd quarter results for the fiscal year ending March, 2023

(From April 1, 2022 to September 30, 2022)

(1) Consolidated financial results

(% indicates changes from the previous corresponding period)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

(Yen in millions)

％

(Yen in millions)

％

(Yen in millions)

％

(Yen in millions)

％

FY2022

10,762

-3.5

941

-15.2

925

-19.9

614

-20.7

(Apr.1,2022-Sep.30,2022)

FY2021

11,156

10.0

1,111

22.4

1,154

8.7

775

5.7

(Apr.1,2021-Sep.30,2021)

(Notes)Comprehensive income: FY2022(2022/9) 617 million yen (-22.7%) FY2021(2021/9) 798 million yen (6.0%)

Profit per share

Fully diluted profit

per share

(Yen)

(Yen)

FY2022

33.22

－

(Apr.1,2022-Sep.30,2022)

FY2021

41.91

－

(Apr.1,2021-Sep.30,2021)

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

FY2022

(Yen in millions)

(Yen in millions)

％

21,484

6,736

31.3

(As of Sep.30,2022)

FY2021

21,384

6,174

28.8

(As of Mar.31,2022)

(Notes) Equity FY2022(2022/9)

6,727 million yen FY2021(2022/3)

6,165 million yen

2．Dividends

Annual dividends per share

1st quarter

2nd quarter

3rd quarter

4th quarter

Total

FY2021

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

(Apr.1,2021-Mar.31,2022)

－

3.00

－

3.00

6.00

FY2022

－

3.00

(Apr.1,2022-Mar.31,2023)

FY2022(Forecast)

－

3.00

6.00

(Note) Revision of dividend forecasts in the current quarter: None

3．Consolidated forecasts for March 2023 term (From April 1, 2022 to March 31,2023)

(% indicates changes from the previous corresponding period)

	Net sales	Operating profit	Ordinary profit	Profit attributable to	Profit per share
	owners of parent
	(Yen in millions)	％	(Yen in millions)	％	(Yen in millions)	％	(Yen in millions)	％	(Yen)
Full year	20,450	-0.1	650	57.3	608	37.4	400	-10.1	21.62

(Note) Revision of consolidated financial results forecasts: None

1

TAC Co.,Ltd Consolidated Financial Results for the Six Months Ended September 30, 2022

• Notes
• 1. Significant changes in scope of consolidation (Changes in consolidated subsidiaries): None
  2. Application of the simplified accounting method and/or the special accounting method for quarterly consolidated financial statements: None
  3. Changes in accounting policies, changes in accounting estimates, and restatements

(3)-1 Changes in accounting policies due to the revision of accounting standards: Yes

(3)-2 Changes in accounting policies other than (3)-1: None

(3)-3 Changes in accounting estimates: None

(3)-4 Restatements: None

(4)Number of shares issued (common stocks)

(4)-1 Number of shares issued at the end of the period (including treasury shares)

(4)-2 Number of treasury shares at the end of the period

(4)-3 Average number of shares during the period

FY2022	18,504,000	shares	FY2021	18,504,000	shares
2nd quarter
FY2022	68	shares	FY2021	68	shares
2nd quarter
FY2022	18,503,932	shares	FY2021	18,503,932	shares
2nd quarter	2nd quarter

• This "Consolidated Financial Results" are outside the scope of the audit.
• Explanation of proper use of financial forecasts and other special notes:

The above forecasts are based on the information available at this time and on assumptions deemed to be reasonable. Therefore, the actual financial results may differ significantly from the forcasts due to various factors.

2

TAC Co.,Ltd Consolidated Financial Results for the Six Months Ended September 30, 2022

(Table of contents of appendix)

1. Qualitative information on quarterly financial results
2. 1. Overview of operating results
   2. Overview of financial position
3. Quarterly consolidated financial statements and notes
4. 1. Quarterly consolidated balance sheet
   2. Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income
   3. Quarterly consolidated statement of cash flows
   4. Notes for quarterly consolidated financial statements (Going-Concern Assumption)
      (Notes on significant changes in the amount of shareholders' equity) (Changes in accounting policy)
      (Segment information) (Revenue recognition)

3

TAC Co.,Ltd Consolidated Financial Results for the Six Months Ended September 30, 2022

1．Qualitative information on quarterly financial results

1. Overview of operating results

1. Overview of 2nd quarter

In the business of supporting acquisition of license qualifications, tuition fees are paid by the student upon application for a particular course. This constitutes sales on a cash basis. Upon payment, the entire amount of tuition received is credited to advances received (liability) and reduced to recognize sales on an accrual basis in the relevant accounting periods in which the service is provided to the student. While sales recorded in the income statement are sales on an accrual basis, for business management purposes we attach great importance to growth in sales on a cash basis.

In the current period, net sales on a cash basis decreased 5.2%, or by ¥577 million, year on year to ¥10,419 million. Net sales on an accrual basis after adjustment of advances received decreased 3.5%, or by ¥393 million to ¥10,762 million.

Cost of sales decreased 4.4%, or by ¥278 million year on year to ¥6,119 million. Selling, general and administrative expenses increased 1.5%, or by ¥54 million year on year to ¥3,701 million. In total, operating profit for the current period decreased 15.2%, or by ¥169 million year on year to ¥941 million.

Non-operating income of ¥13 million was recorded, including interest income of ¥4 million. Nonoperating expenses of ¥30 million were posted including interest expenses of ¥17 million. As a result, ordinary profit decreased 19.9%, or by ¥229 million year on year to ¥925 million.

In the current period, loss on sale and retirement of non-current assets of ¥2 million was posted as an extraordinary loss. As a result, profit decreased 20.7%, or by ¥160 million year on year to ¥615 million and profit attributable to owners of parent decreased 20.7%, or by ¥160 million year on year to ¥614 million.

Quarterly results of TAC Group are as shown below. Net sales before adjustment of advances received represent net sales totaling the amount paid upon registration. Net sales after adjustment of advances received represent net sales after allocating the amount paid upon registration to corresponding periods in accordance with provision of educational services.

License examinations covered by our educational courses have some notable features including (i) examinations of Certified Public Accountant and Certified Public Tax Accountant, our flagship, implemented from spring to autumn (1st to 3rd quarters) and (ii) registration to Public Officer courses, whose main clients are university students, concentrating in spring to summer (1st to 2nd quarters). Accordingly, registration for educational courses in the 4th quarter (net sales before adjustment of advances received) tends to be weaker compared to other quarters. Meanwhile, operating expenses including rent expenses, instructors' fees and advertising costs are allocated evenly to each month, causing no variance in quarterly results.

4

TAC Co.,Ltd Consolidated Financial Results for the Six Months Ended September 30, 2022

Changes in fiscal operating results between this year and last year:

FY2021	1st quarter		2nd quarter			3rd quarter		4th quarter		Total for FY2021
(Apr.2021-Mar.2022)	(April - June)	(July-September)	(October-December)	(January-March)	(Apr.2021-Mar.2022)
			%		Y-O-Y		%		Y-O-Y			%		Y-O-Y		%		Y-O-Y		%	Y-O-Y
		Yen in			%	Yen in			%		Yen in				%	Yen in			%	Yen in		%
Net sales (before	millions				millions					millions					millions				millions
5,049			121.9	5,947			103.3	4,536				92.8	4,612			91.8	20,146		101.7
adjustment of
tuition advances)
Adjustment of		687			71.4	-528			－	-92				－	259			867.0	325		－
tuition advances
Net sales (after	5,736	28.0		112.4	5,419	26.5		107.5	4,443		22.5		97.7	4,872	23.8		96.4	20,471	100.0	103.7
adjustment of
tuition advances)
Gross profit		2,475	43.2		109.3	2,282	42.1		103.6	1,348		30.3		90.8	1,707	35.1		96.4	7,814	38.2	101.2
Operating profit	622	10.9		121.4	488	9.0		123.7	-445		-10.0		－	-252	-5.2		－	413	2.0	102.2
Ordinary profit	628	11.0		122.5	525	9.7		95.8	-445		-10.0		－	-266	-5.5		－	442	2.2	68.5
Profit attributable	432	7.5		123.6	342	6.3		89.4	-319		-7.2		－	-11	-0.2		－	444	2.2	109.7
to owners of parent
Net profit per share	Yen				Yen					Yen					Yen				Yen
23.38				18.53					-17.26					-0.60				24.05
(Notes)	1．Percentage of quarterly net sales stated as a proportion of total net sales.
	2．Other percentages stated as a proportion of quarterly net sales.
FY2022	1st quarter		2nd quarter
(Apr.2022-Mar.2023)	(April - June)	(July-September)
			%		Y-O-Y		%		Y-O-Y
		Yen in			%	Yen in			%
Net sales (before	millions				millions
adjustment of		4,739			93.9	5,680			95.5
tuition advances)
Adjustment of		836			121.7	-493			－
tuition advances
Net sales (after
adjustment of		5,575	－		97.2	5,186	－		95.7
tuition advances)
Gross profit		2,431	43.6		98.2	2,212	42.7		96.9
Operating profit	549	9.9		88.3	391	7.6		80.2
Ordinary profit	534	9.6		85.0	390	7.5		74.2
Profit attributable	351	6.3		81.2	263	5.1		76.8
to owners of parent
Net profit per share	Yen				Yen
18.98				14.24
(Notes)	1．Percentage of quarterly net sales stated as a proportion of total net sales.
	2．Other percentages stated as a proportion of quarterly net sales.

(B) Segment-related information

Operating performance (net sales on a cash basis) and an overview of each segment of TAC group in the current period is as shown below. With regards to segment information, TAC introduced a management approach by adopting "Accounting Standards for the Disclosure of Segment Information". Accordingly, net sales data are presented in the following tables as "net sales on a cash basis before adjustment of advances received" so as to reflect management decision-making of TAC group in a more appropriate manner. Please note that net sales on a cash basis are different from those shown on the consolidated quarterly income statement. For details, please refer to "Segment information" on page 19.

Segment information		2nd quarter of FY2021			2nd quarter of FY2022
	Percentage	Y-O-Y			Percentage		Y-O-Y
	Yen in millions	%	%	Yen in millions	%	%
Personal Education	6,110	55.5	102.2	5,632		54.1		92.2
Corporate Training	2,306	21.0	114.8	2,367		22.7		102.7
Publishing	2,306	21.0	139.0	2,130		20.4		92.4
Manpower Business	302	2.8	108.6	315		3.0		104.4
Eliminations	-28	-0.3	―	-26		-0.2		―
Total	10,997	100.0	111.1	10,419		100.0		94.8
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