Wakita : Summary of Financial Results 2021

Consolidated Financial Results

for the Fiscal Year ended February 28, 2021

(Japanese GAAP)

April 9, 2021

Company Name: Wakita & Co., LTD.

Code Number: 8125

(URL: http://www.wakita.co.jp/)

Stock Exchange Listing: Tokyo Stock Exchange First Section

Representative: Teiji Wakita, President and Representative Director

Contact: Toshio Oda, Managing Director

Phone: [phone]

Scheduled date of Ordinary General Shareholders' Meeting: May 27, 2021

Scheduled date to commence dividend payment: May 28, 2021

Scheduled date to submit the Securities Report: May 28, 2021

Supplementary information for financial results: Not available

Organization of financial results briefing: None

(Figures are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal 2021 (From March 1, 2020 to February 28, 2021)

(1) Consolidated Results of Operations			(Percentage figures indicate changes from the previous year)
	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
Fiscal 2021	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
74,015	(10.0)	5,422	(7.9)	5,661	(6.1)	3,191	(11.5)
Fiscal 2020	82,275	16.7	5,889	(7.7)	6,029	(8.0)	3,607	(13.8)

(Note) Comprehensive income: Fiscal 2021: ¥3,754 million [6.6%]

	Fiscal 2020: ¥3,521 million [(3.6)%]
	Profit per share	Fully diluted profit	Rate of return on	Ordinary profit to	Operating profit to
	per share	equity	total assets	net sales
	Yen	Yen	%	%	%
Fiscal 2021	61.46	-	3.3	4.1	7.3
Fiscal 2020	69.46	-	3.8	4.5	7.2

(Reference) Equity in earnings (losses) of affiliated companies: Fiscal 2021: ¥ - million Fiscal 2020: ¥ - million

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio	Net assets per share
	Millions of yen	Millions of yen	%	Yen
Fiscal 2021	137,477	97,150	70.3	1,860.68
Fiscal 2020	137,855	95,112	68.7	1,823.71

(Reference) Equity: Fiscal 2021: ¥96,632 million Fiscal 2020: ¥94,713 million

(3) Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at the end of
	operating activities	investing activities	financing activities
	the period
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
Fiscal 2021	13,228	(4,274)	(6,458)	26,498
Fiscal 2020	9,374	(7,347)	(6,187)	24,007

1

2. Dividends

		Cash dividends per share			Total dividends	Payout ratio		Dividends to
								net assets
	End of 1Q	End of 2Q	End of 3Q	Year-end	Total		paid (total)	(consolidated)
			(consolidated)
	Yen	Yen	Yen	Yen	Yen		Millions of yen	%	%
Fiscal 2020	-	0.00	-	33.00	33.00	1,716	47.5	1.8
Fiscal 2021	-	0.00	-	30.00	30.00	1,560	48.8	1.6
Fiscal 2022 (Forecast)	-	0.00	-	33.00	33.00			49.0

3. Forecast of Consolidated Financial Results for Fiscal 2022 (From March 1, 2021 to February 28, 2022)

(Percentage figures indicate changes from the previous year)

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Profit per share
				owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	75,200	1.6	5,700	5.1	5,800	2.4	3,500	9.7	67.39

* Notes

1. Significant changes of subsidiaries during the period under review (affecting specific subsidiaries due to changes in scope of consolidation): None
   Companies added to the scope: None
   Companies removed from the scope: None
2. Changes in accounting policies, changes in accounting estimates and restatements
3. 1. Changes in accounting policies due to the revision of accounting standards, etc.: Not applicable
   2. Any changes in accounting policies other than 1) above: Not applicable
   3. Changes in accounting estimates: Not applicable
   4. Restatements: Not applicable
4. Number of shares issued (common shares)
5. 1. Number of shares issued at the end of period (including treasury shares):

Fiscal 2021: 52,021,297 shares

Fiscal 2020: 52,021,297 shares

1. Number of treasury shares at the end of period: Fiscal 2021: 87,176 shares
   Fiscal 2020: 86,966 shares
2. Average number of shares during the period: Fiscal 2021: 51,934,330 shares
   Fiscal 2020: 51,933,039 shares

(Note) Treasury shares at the end of period are presented including the Company shares held by the Board Benefit Trust. Average numbers of shares during the period are calculated deducting treasury shares which include the Company shares held by the Board Benefit Trust.

2

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for Fiscal 2021 (From March 1, 2020 to February 28, 2021)

(1) Non-consolidated Results of Operations			(Percentage figures indicate changes from the previous year)
		Net sales		Operating profit	Ordinary profit		Profit
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Fiscal 2021		54,006	(17.8)	4,511	(17.2)	4,906	(14.8)	3,199	(16.9)
Fiscal 2020		65,679	10.4	5,448	(2.1)	5,761	(1.9)	3,851	(4.2)
		Profit per share	Fully diluted profit
		per share
			Yen		Yen
Fiscal 2021			61.60		-
Fiscal 2020			74.16		-
(2) Non-consolidated Financial Position
		Total assets	Net assets		Equity ratio		Net assets per share
		Millions of yen	Millions of yen		%		Yen
Fiscal 2021			125,778		95,451		75.9		1,837.93
Fiscal 2020			126,702		93,599		73.9		1,802.26
(Reference) Equity: Fiscal	2021: ¥95,451 million
	Fiscal 2020: ¥93,599 million

2. Forecast of Non-consolidated Financial Results for Fiscal 2022 (From March 1, 2021 to February 28, 2022)

(Percentage figures indicate changes from the previous year)

	Net sales		Ordinary profit		Profit		Profit per share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	53,200	(1.5)	5,000	1.9	3,400	6.3	65.47

*These Consolidated Financial Results are not subject to audits by certified public accountants or an auditing firm.

• Explanation for the appropriate use of performance forecasts and other special notes:
  The performance forecasts and other descriptions on future events presented in this material are based on information that was available at the time of preparation of this material and based on certain assumptions considered to be reasonable, and not intended to guarantee their achievement. The actual performance, etc. may differ materially from these forecasts due to various factors.

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Consolidated Financial Statements

(1) Consolidated Balance Sheets

			(Millions of yen)
		As of February 29, 2020	As of February 28, 2021
Assets
	Current assets
	Cash and deposits	17,498	21,124
	Notes and accounts receivable - trade	30,370	24,958
	Securities	7,112	5,373
	Merchandise	2,952	2,880
	Supplies	105	114
	Other	478	404
	Allowance for doubtful accounts	(136)	(102)
	Total current assets	58,381	54,754
	Non-current assets
	Property, plant and equipment
	Assets for rent	33,530	35,363
	Accumulated depreciation	(23,607)	(25,589)
	Assets for rent, net	9,923	9,773
	Real estate for rent
	Buildings and accompanying facilities for rent	28,927	31,633
	Accumulated depreciation	(8,327)	(9,510)
	Buildings and accompanying facilities for rent, net	20,599	22,123
	Land for rent	19,646	21,017
	Buildings and structures	11,147	11,648
	Accumulated depreciation	(6,202)	(6,454)
	Buildings and structures, net	4,944	5,193
	Land	7,809	8,281
	Leased assets	25	39
	Accumulated depreciation	(20)	(25)
	Leased assets, net	5	13
	Other	2,455	2,447
	Accumulated depreciation	(1,636)	(1,628)
	Other, net	819	819
	Total property, plant and equipment	63,748	67,222
	Intangible assets
	Goodwill	9,121	8,030
	Other	246	358
	Total intangible assets	9,367	8,388
	Investments and other assets
	Investment securities	4,169	4,703
	Retirement benefit asset	454	620
	Deferred tax assets	268	285
	Other	1,769	1,906
	Allowance for doubtful accounts	(304)	(403)
	Total investments and other assets	6,357	7,111
	Total non-current assets	79,474	82,722
	Total assets	137,855	137,477

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(Millions of yen)

As of February 29, 2020 As of February 28, 2021

Liabilities

Current liabilities

Notes and accounts payable - trade

Short-term borrowings

Current portion of long-term borrowings

Lease obligations

Income taxes payable

Provision for bonuses

Other

Total current liabilities

Non-current liabilities

Long-term borrowings

Lease obligations

Deferred tax liabilities

Deferred tax liabilities for land revaluation

Provision For Share Based Compensation Expenses For Directors

Provision for retirement benefits for directors (and other officers)

Provision for loss on guarantees

Retirement benefit liability

Long-term accounts payable - facilities

Other

Total non-current liabilities

Total liabilities

Net assets

Shareholders' equity

Share capital

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges

Revaluation reserve for land

Remeasurements of defined benefit plans

16,916	14,771
2,180	1,540
6	3
18	11
1,432	1,309
319	350
6,798	7,224
27,670	25,210
6	3
7	14
678	780
537	435
46	74
12	15
233	―
215	213
9,627	9,459
3,706	4,118
15,072	15,116
42,743	40,327
13,821	13,821
16,627	16,627
65,358	67,064
(107)	(107)
95,700	97,406
877	1,251
7	(16)
(1,914)	(2,144)
41	135

Total accumulated other comprehensive income	(987)	(773)
Non-controlling interests	399	517
Total net assets	95,112	97,150
Total liabilities and net assets	137,855	137,477

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(2) Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Income

			(Millions of yen)
		Fiscal 2020	Fiscal 2021
		(From March 1, 2019	(From March 1, 2020
		to February 29, 2020)	to February 28, 2021)
Net sales		82,275	74,015
Cost of sales	63,906	55,413
Provision of unrealized income on installment sales		340	171
Reversal of unrealized income on installment sales	314	316
Gross profit		18,343	18,747
Selling, general and administrative expenses		12,453	13,325
Operating profit		5,889	5,422

Non-operating income

Interest income

Dividend income

Purchase discounts

Foreign exchange gains

Gain on investments in investment partnerships Subsidy income

Other

Total non-operating income

Non-operating expenses

Interest expenses

Other

Total non-operating expenses

Ordinary profit

Extraordinary income

Gain on sales of non-current assets

Gain on sales of investment securities

Total extraordinary income

Extraordinary losses

Loss on sales of non-current assets Loss on retirement of non-current assets

Loss on valuation of investment securities Provision for loss on guarantees

	23		22
	95	89
			48
	50
	12	16
			43
	22
	―	71
			61
	61
	264	352
	98	101
			12
	25
	124	113
	6,029	5,661
	8	25

9―

	18		25
	0
	223
	4	11

15―

68―

Total extraordinary losses		88	235
Profit before income taxes		5,958	5,451
Income taxes - current		2,430	2,334
Income taxes - deferred	(161)	(198)
Total income taxes		2,268	2,136
Profit		3,690	3,315
Profit attributable to non-controlling interests		82	123
Profit attributable to owners of parent		3,607	3,191

6

Consolidated Statements of Comprehensive Income

		(Millions of yen)
	Fiscal 2020	Fiscal 2021
	(From March 1, 2019	(From March 1, 2020
	to February 29, 2020)	to February 28, 2021)
Profit	3,690	3,315
Other comprehensive income

Valuation difference on available-for-sale securities

Deferred gains or losses on hedges

Remeasurements of defined benefit plans, net of tax

Total other comprehensive income

Comprehensive income

Comprehensive income attributable to Comprehensive income attributable to owners of

parent

Comprehensive income attributable to non- controlling interests

	(173)		375
	22	(30)
	(17)	94
	(168)	439
	3,521	3,754
	3,434	3,635
	87	118

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(3) Consolidated Statements of Changes in Net Assets

Fiscal 2020 (From March 1, 2019 to February 29, 2020)

(Millions of yen)

						Shareholders' equity
	Share capital		Capital surplus	Retained earnings		Treasury shares	Total shareholders'
				equity
Balance at beginning of	13,821		16,627		63,311			(111)		93,649
period
Changes during period
Dividends of surplus							(1,560)					(1,560)
Profit attributable to							3,607					3,607
owners of parent
Purchase of treasury											(0)		(0)
shares
Disposal of treasury											4		4
shares
Reversal of revaluation													―
reserve for land
Net changes in items
other than shareholders'
equity
Total changes during			―		―		2,047			4		2,051
period
Balance at end of period	13,821		16,627		65,358			(107)		95,700
			Accumulated other comprehensive income
	Valuation								Total	Non-controlling	Total net assets
					Remeasurements		accumulated
	difference on	Deferred gains or	Revaluation		interests
	of defined			other
	available-for-sale		losses on hedges	reserve for land
		benefit plans		comprehensive
	securities
							income
Balance at beginning of	1,051		(10)	(1,914)	58			(814)		311	93,146
period
Changes during period
Dividends of surplus													(1,560)
Profit attributable to													3,607
owners of parent
Purchase of treasury													(0)
shares
Disposal of treasury													4
shares
Reversal of revaluation													―
reserve for land
Net changes in items
other than shareholders'	(173)		18	―	(17)		(172)		87	(85)
equity
Total changes during	(173)		18	―	(17)		(172)		87	1,966
period
Balance at end of period	877		7	(1,914)	41			(987)		399	95,112

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Fiscal 2021 (From March 1, 2020 to February 28, 2021)

(Millions of yen)

							Shareholders' equity
	Share capital		Capital surplus	Retained earnings		Treasury shares	Total shareholders'
				equity
Balance at beginning of		13,821		16,627		65,358			(107)		95,700
period
Changes during period
Dividends of surplus								(1,716)					(1,716)
Profit attributable to								3,191					3,191
owners of parent
Purchase of treasury												(0)		(0)
shares
Disposal of treasury						(0)						0		0
shares
Reversal of revaluation								229					229
reserve for land
Net changes in items
other than shareholders'
equity
Total changes during				―		(0)		1,705			(0)		1,705
period
Balance at end of period		13,821		16,627		67,064			(107)		97,406
				Accumulated other comprehensive income
	Valuation									Total	Non-controlling	Total net assets
						Remeasurements		accumulated
	difference on		Deferred gains or	Revaluation		interests
		of defined			other
	available-for-sale			losses on hedges	reserve for land
			benefit plans		comprehensive
	securities
								income
Balance at beginning of	877			7	(1,914)	41			(987)		399	95,112
period
Changes during period
Dividends of surplus														(1,716)
Profit attributable to														3,191
owners of parent
Purchase of treasury														(0)
shares
Disposal of treasury														0
shares
Reversal of revaluation														229
reserve for land
Net changes in items
other than shareholders'	374			(24)	(229)	94			214		118	332
equity
Total changes during	374			(24)	(229)	94			214		118	2,037
period
Balance at end of period	1,251			(16)	(2,144)	135			(773)		517	97,150

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(4) Consolidated Statement of Cash Flows

							(Millions of yen)
					Fiscal 2020		Fiscal 2021
					(From March 1, 2019		(From March 1, 2020
					to February 29, 2020)		to February 28, 2021)
	Cash flows from operating activities
		Profit before income taxes	5,958	5,451
		Depreciation			4,641		4,942
		Amortization of goodwill	788	1,090
		Increase (decrease) in allowance for doubtful accounts			111		(167)
		Increase (decrease) in provision for bonuses	17	30
		Increase (decrease) in net defined benefit asset and liability			(45)		(31)
		Increase (decrease) in provision for loss on guarantees	68		―
		Interest and dividend income			(118)		(111)
		Interest expenses	98	101
		Loss (gain) on sales and retirement of property, plant and equipment			(3)		210
		(Gain) loss on sales or redemption of investment securities	(9)		―
		Loss (gain) on valuation of investment securities			15		―
		Decrease (increase) in trade receivables	(2,930)	5,412
		Decrease (increase) in inventories			533		62
		Increase (decrease) in trade payables	2,020	(2,145)
		Other, net			485		1,036
		Subtotal		11,632	15,882
		Interest and dividends received			117		113
		Interest paid	(98)	(101)
		Income taxes paid			(2,276)		(2,432)
		Payment for execution of a guarantee			―	(233)
		Net cash provided by (used in) operating activities			9,374		13,228
	Cash flows from investing activities
		Purchase of securities			(100)		(200)
		Proceeds from redemption of securities	100	200
		Purchase of property, plant and equipment			(2,485)		(5,078)
		Proceeds from sales of property, plant and equipment	14	363
		Purchase of investment securities			(388)		(1)
		Proceeds from sales and redemption of investment securities	63	603
		Loan advances			(6)		(3)
		Collection of loans receivable	29	27
		Purchase of shares of subsidiaries resulting in change in scope of			(4,539)		―
		consolidation
		Other payments	(58)	(206)
		Other proceeds			24		20
		Net cash provided by (used in) investing activities		(7,347)	(4,274)
	Cash flows from financing activities
		Net increase (decrease) in short-term borrowings	(640)	(640)
		Repayments of long-term borrowings			(549)		(6)
		Repayments of lease obligations	(21)	(17)
		Payments for installment payables - property and equipment			(3,413)		(4,074)
		Purchase of treasury shares	(0)	(0)
		Proceeds from sales of treasury shares			―		0
		Dividends paid	(1,562)	(1,720)
		Net cash provided by (used in) financing activities			(6,187)		(6,458)
	Effect of exchange rate change on cash and cash equivalents		(0)	(3)
	Net increase (decrease) in cash and cash equivalents			(4,159)		2,491
	Cash and cash equivalents at beginning of period		28,167	24,007
	Cash and cash equivalents at end of period			24,007		26,498

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