Yondoshi : CONSOLIDATED FINANCIAL REPORT（Japanese GAAP） FIRST HALF OF THE FISCAL YEAR ENDING FEBRUARY 28, 2023 (March 1, 2022 to August 31, 2022)

CONSOLIDATED FINANCIAL REPORT（Japanese GAAP）

FIRST HALF OF THE FISCAL YEAR ENDING

FEBRUARY 28, 2023

(March 1, 2022 to August 31, 2022)

October 7, 2022

YONDOSHI HOLDINGS INC. is listed on the Prime Market of the Tokyo Stock Exchange under the securities code number 8008.

Representative:	Hidetoshi Masuda, President and Representative Director
Inquiries:	Masahiko Nishimura, Managing Director, Managing Executive Officer
	representative for Finance
	Tel: [phone]

URL: https:// yondoshi.co.jp/

Quarterly Securities Report filing date (planned): October 14, 2022

Supplemental materials prepared for quarterly financial results: Yes

Holding of quarterly financial results meeting: Yes (for analysts and institutional investors)

Dividend payment commencement date (planned): November 11, 2022

(Millions of yen rounded down)

1. Consolidated Operating Results for the First Half of Fiscal 2022

(March 1, 2022 to August 31, 2022)

1. Consolidated Operating Results (Cumulative)

(Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.)

			Net sales		Operating Income	Ordinary Income	Profit attributable to
				owners of parent
			Millions of yen	％	Millions of yen	％	Millions of yen	％	Millions of yen	％
	FY2022 First Half		18,514	4.0	645	50.1	822	14.9	513	83.2
	FY2021 First Half		17,806	(1.0)	429	(58.8)	715	(44.3)	280	(53.5)
Note: Comprehensive income	FY2022 First Half: (2,913) million yen (－%)	FY2021 First Half: 740 million yen (－46.2%)
			Net Income		Net Income per
			per Share		Share after Dilution
				Yen		Yen
	FY2022 First Half		23.95		-
	FY2021 First Half		13.08		-
	(Reference) Operating income	before the amortization	of goodwill:
	FY 2022 First Half: ¥893 million	FY 2021 First Half: ¥678 million
The Company considers operating income before the amortization of goodwill to be an important management indicator.

Note: The Company applied "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the first quarter of the subject fiscal year. Figures for the second quarter of the fiscal year ending February 28, 2023, are after application of this accounting standard.

1. Consolidated Financial Position

		Total Assets	Net Assets	Net Assets to Total	Net Assets per Share
		Assets
		Millions of yen	Millions of yen	%	Yen
	August 31, 2022	52,890		39,120	73.9	1,823.11
	February 28, 2022	56,884		42,917	75.4	2,001.22
	(Reference)Shareholders' equity:	August 31, 2022: 39,093 million yen	February 28, 2022: 42,893 million yen

Note: The Company applied "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the first quarter of the subject fiscal year. Figures for the second quarter of the fiscal year ending February 28, 2023, are after application of this accounting standard.

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2.	Dividends
				Dividends per Share
(Record Date)	End of 1Q	End of 2Q	End of 3Q	Year-end	Annual
		Yen	Yen	Yen	Yen	Yen
Fiscal 2021	-	41.50	-	41.50	83.00
Fiscal 2022	-	41.50
Fiscal 2022			-	41.50	83.00
(Forecast)
Note: Revision to the most recently announced cash dividend forecast: No

3. Forecasts of Consolidated Operating Results for the Fiscal Year Ending February 28, 2023

(March 1, 2022 to February 28, 2023)

			(% figures for the full fiscal	year represent year-on-year	increase or decrease)
	Net Sales		Operating Income	Ordinary Income	Profit attributable to	Net Income
		owners of parent	per Share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Fiscal year
ending	40,500	6.2	2,700	51.0	3,300	30.8	1,800	20.8	83.96
February 28,
2023

Note: Revision to the most recently announced operating results forecast: Yes (Reference) EPS before the amortization of goodwill in FY 2022 is ¥107.11.

Notes

1. Changes in Important Subsidiaries during the Period:
   (Changes in specified subsidiaries that caused changes in the scope of consolidation): No
2. Application of Special Accounting Practices in the Preparation of the Quarterly Consolidated Financial Statements: Yes
3. Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements
4. 1. Changes of accounting principles in line with revisions to accounting and other standards: Yes
   2. Changes of accounting principles other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
5. Number of Shares Issued and Outstanding (Common Stock)

1. Total number of shares issued and outstanding (including treasury stock) as of the period-end:

August 31, 2022: 24,331,356 shares

Feb. 28, 2022: 24,331,356 shares

2. Total number of treasury stock as of the period-end:

August 31, 2022: 2,888,238 shares

Feb. 28, 2022: 2,897,922 shares

3. Average number of shares for the period (Cumulative total for the quarterly consolidated period)

FY2022 First Half: 21,439,768 shares

FY2021 First Half: 21,425,904 shares

Note: The number of recorded treasury stock includes 97,170 of the Company' shares held by the Shares Grant Trust for Officers as of the end of the second quarter of the subject consolidated fiscal year.

The financial statement summary is not subject to auditing by certified public accountants or audit firms.

Explanation concerning the Proper Use of Operating Results Forecasts and Other Relevant Specific Items

1. The forecasts of operating results and other items concerning the future contained in this document are based on management's assumptions and beliefs that are determined to be reasonable in light of currently available information, YONDOSHI HOLDINGS INC. cautions readers that due to a variety of factors actual results may differ materially from forecasts. For the assumptions that underpin operating results forecasts as well as cautionary notes on the use of operating results forecasts, please refer to "1. Qualitative Information on Business and Financial Results (3) Explanation of Consolidated Results Forecasts and Other Future Predictions" on page 5.
2. The Company plans to hold financial results briefing on October 7, 2022 (Friday) for institutional investors and analysts. Presentation materials used that day will be posted to the Company's website promptly after the briefing.

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Contents
1. Qualitative Information on Business and Financial Results	4
(1)	Explanation of Business Results	4
(2)	Explanation of Financial Condition	4
(3)	Explanation of Consolidated Results Forecasts and Other Future Predictions	5
2. Consolidated Quarterly Financial Statements	6
(1)	Consolidated Quarterly Balance Sheets	6
(2)	Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of	8
	Comprehensive Income
	Consolidated Quarterly Statements of Income Second Quarter Cumulative	8
	Consolidated Quarterly Statements of Comprehensive Income Second Quarter Cumulative	9
(3)	Consolidated Quarterly Statements of Cash Flows	10
(4)	Notes to Consolidated Quarterly Financial Statements	12
	(Notes Regarding Going Concern Assumptions)	12
	(Notes Regarding Substantial Changes in Shareholders' Equity)	12
	(Changes in Accounting Policies)	12
	(Adoption of Accounting Standard for Fair Value Measurement)	13
	(Application of Special Accounting Treatment in the Preparation of the Consolidated	13
	Financial Statements)
	(Additional Information)	13
	(Segment Information)	15
	(Matters related to revenue recognition)	16
	(Important Subsequent Events)	16

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1. Qualitative Information on Business and Financial Results

(1) Explanation of Business Results

During the first half period (March 1, 2022 to August 31, 2022) of fiscal 2022 (the fiscal year ending February 28, 2023) despite a temporary upswing in the number of COVID-19 cases, economic activity continued to return to normal. Meanwhile, the ongoing surge in resource and energy prices as well as the sharp depreciation in the value of the yen are impacting activities throughout the corporate sector.

While consumer spending exhibited a pickup owing to the relaxation of restrictions on people's movements, which triggered an increase in opportunities to go out, the outlook remains unclear amid concerns of a cooling off in consumer sentiment as a result of the series of price hikes in the retail industry.

Under such circumstances, during fiscal 2022, the second year of the sixth medium-term management plan, YONDOSHI HOLDINGS Group, in response to the changes in the business environment, will leverage the strengths of the corporate group to the fullest extent in order to provide products and services that exceed customer expectations, with the aim of further growth. In addition, the Company is practicing sustainable management to establish a highly trusted corporate group, and is working to enhance enterprise value by strengthening internal controls, providing shareholder returns, and making medium to long-term investments linked to earnings growth.

As a result, net sales for the subject first half period amounted to ¥18,514 million (up 4.0% from the same period of the previous fiscal year), with operating income of ¥645 million (up 50.1%), ordinary income of ¥822 million (up 14.9%) and profit attributable to owners of parent to ¥513 million (up 83.2%). Operating income before the amortization of goodwill, which the Company considers to be an important management indicator, amounted to ¥893 million (down 31.7%).

Operating results by business segment were as follows.

Jewelry Business

The F.D.C. Products Group, which operates the jewelry business, recorded strong trends in 50th anniversary limited-edition products as well as fashion jewelry including earrings and bracelets. In addition, e-commerce business sales also expanded steadily on the back of the full renewal of the e- commerce site in March.

As a result, net sales in the Jewelry Business segment amounted to ¥8,306 million (up 4.7% from the same period of the previous fiscal year), with operating income of ¥370 million (up 293.9%).

Apparel Business

Retailer age Co., Ltd., operator of the everyday fashion brand PALETTE, recorded an increase in sales. Operating income trends were also firm. In addition to the opening of two new stores, these results were attributable to existing store growth on the back of efforts to strengthen product proposal capabilities.

The AS'TY Group reported an upswing in sales. Despite the negative impact in part by the weak yen and higher material costs, this upswing in sales was largely attributable to the recovery in demand and efforts to strengthen activities with mainstay business partners.

As a result, net sales in the Apparel Business segment amounted to ¥10,207 million (up 3.4% from the same period of the previous fiscal year). Operating income declined to ¥490 million (down 10.3%).

1. Explanation of Financial Condition Assets, Liabilities and Net Assets
   Total assets as of the end of the second quarter (August 31, 2022) of the fiscal year ending February 28, 2023 amounted to ¥52,890 million, a decrease of ¥3,993 million from the end of the previous fiscal year (February 28, 2022). This decrease in total assets is largely due to the decline in investment securities of ¥3,372 million. Total liabilities amounted to ¥13,770 million, a decrease of ¥196 million from the end of the previous fiscal year. Despite the increase in short-term borrowings of ¥1,300 million, this decrease was mainly due to the downturn in deferred tax liabilities of ¥1,818 million. Total net assets as of the subject period under review came to ¥39,120 million, a decrease of ¥3,797 million from the end of the previous fiscal year. This largely reflected to decline in valuation difference on available-for-sale securities of ¥3,469 million.

Cash Flows

Cash and cash equivalents as of the end of the second quarter of the fiscal year under review stood at ¥2,332 million, a decrease of ¥567 million from the end of the previous fiscal year.

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(Cash Flows from Operating Activities)

Net cash provided by operating activities amounted to ¥1,282 million, up ¥1,268 million from the same period of the previous fiscal year. Major cash inflows included income before income taxes and such non- cash items as depreciation.

(Cash Flows from Investing Activities)

Net cash used in investing activities came to ¥2,234 million, down ¥2,407 million from the same period of the previous fiscal year. The principal cash outflows included the purchase of investment securities as well as property, plant and equipment.

(Cash Flows from Financing Activities)

Net cash provided by financing activities amounted to ¥383 million, up ¥1,282 million from the same period of the previous fiscal year. While YONDOSHI HOLDINGS Group recorded such cash outflows as cash dividends paid, this was more than offset by cash inflows including net increase in short-term borrowings.

(3) Explanation of Consolidated Results Forecasts and Other Future Predictions

Taking into consideration the Company's consolidated results for the first half of the fiscal year under review, YONDOSHI HOLDINGS Group revised its net sales forecast for the full fiscal year previously announced on April 14, 2022. Meanwhile, trends in each level of profit are projected to come in in line with plans owing to the increase in profit in the Jewelry Business in the peak Christmas period and successful efforts to reduce overhead expenses.

					(Millions of yen, %)
		Operating	Ordinary	Profit		Net Income per
	Net Sales	attributable to
	Income	Income		Share (Yen)
		owners of parent
Previous Forecast (A)	41,500	2,700	3,000	1,800		83.97
Revised Forecast (B)	40,500	2,700	3,000	1,800		83.96
Net Change (B - A)	(1,000)	0	0	0		―
Percentage Change	(2.4)	0	0	0		―
(Reference) Results of the
previous fiscal year ended	38,123	1,788	2,293	1,490		69.56
February 2022

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