Asahi : Non-consolidated Financial Results for the Three Months Ended May 20, 2022

Disclaimer: This document is an English translation of the original document in Japanese and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original in Japanese, the original shall prevail in all respects.

Non-consolidated Financial Results

for the Three Months Ended May 20, 2022

[Japanese GAAP]

June 27, 2022

Company name: ASAHI CO., LTD.

Stock exchange listing: Tokyo Stock Exchange

Code number: 3333

URL: https://www.cb-asahi.co.jp/

Representative: Yoshifumi Shimoda, President and Representative Director

Contact: Shigeru Mori, Director

Phone: [phone]

Scheduled date of filing quarterly securities report: July 1, 2022

Scheduled date of commencing dividend payments: -

Availability of supplementary explanatory materials on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Not scheduled

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

1. Non-consolidated Financial Results for the Three Months Ended May 20, 2022 (February 21, 2022 - May 20, 2022)

(1) Non-consolidated Operating Results (Cumulative) (% indicates changes from the previous corresponding period.)

	Net sales	Operating profit	Ordinary profit	Profit
Three months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
May 20, 2022	24,246	-	3,440		-	3,455	-	2,349	-
May 20, 2021	24,153	21.5	4,236	36.9	4,326	37.2	2,956	39.0
	Basic earnings	Diluted earnings
	per share	per share
Three months ended		Yen	Yen
May 20, 2022		89.99		-
May 20, 2021		113.37		-

(Note) The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year under review, and the figures for the three months ended May 20, 2022 are those after applying the said accounting standard, etc. Therefore, the percent changes from the previous corresponding period are not presented.

(2) Non-consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of May 20, 2022	50,693	34,227	67.5
As of February 20, 2022	46,473	35,346	76.1

(Reference) Equity: As of May 20, 2022: ¥34,227 million As of February 20, 2022: ¥35,346 million

(Note) The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year under review, and the figures as of May 20, 2022 are those after applying the said accounting standard, etc.

2. Dividends

Annual dividends

1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

-

0.00

-

28.00

28.00

February 20, 2022

Fiscal year ending

-

February 20, 2023

Fiscal year ending

February 20, 2023

-

0.00

-

28.00

28.00

(Forecast)

(Note) Revisions to the most recently announced dividend forecast: None

3. Non-consolidated Financial Results Forecast for the Fiscal Year Ending February 20, 2023 (February 21, 2022 - February 20, 2023)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit		Basic earnings
			per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
First fiscal half	45,000	-	5,600	-	5,650	-	3,700	-	141.75
Full year	78,000	-	5,600	-	5,700	-	3,700	-	141.75

(Notes) 1. Revisions to the most recently announced financial results forecast: None

2. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year under review, and the figures for the three months ended May 20, 2022 are those after applying the said accounting standard, etc. Therefore, the percent changes from the previous corresponding period are not presented.

* Notes:

1. Adoption of special accounting methods for the preparation of quarterly non-consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None

(Note): For details, please refer to 2. Quarterly Non-consolidatedFinancial Statements and Principal Notes, (3) Notes to the Quarterly Non-consolidatedFinancial Statements, (Changes in accounting policies)" on page 7 of the Attachment.

1. Total number of issued shares (common shares)
   1) Total number of issued shares at the end of the period (including treasury shares):

May 20, 2022:	26,240,800 shares
February 20, 2022:	26,240,800 shares
2) Total number of treasury shares at the end of the period:
May 20, 2022:	126,456 shares
February 20, 2022:	126,456 shares
3) Average number of shares outstanding during the period:
Three months ended May 20, 2022:	26,114,344 shares
Three months ended May 20, 2021:	26,103,153 shares

(Note) The Company has adopted the Executive Remuneration BIP Trust since June 19, 2014.

The number of treasury shares at the end of the period includes the Company's shares held by the trust (126,070 shares as of May 20, 2022 and 126,070 shares as of February 20, 2022). In addition, the Company's shares held by the trust are included in the treasury shares to be deducted in the calculation of the average number of shares outstanding during the period (126,070 shares as of May 20, 2022, and 161,590 shares as of May 20, 2021).

• These quarterly non-consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.
• Explanation of the proper use of financial results forecast and other notes

(Cautions regarding forward-looking statements, etc.)

The financial results forecast and other forward-looking statements contained in this document are based on information currently available to the Company and certain assumptions that are deemed reasonable, and do not constitute a promise that the Company will achieve them. Actual results may differ materially from these statements due to various factors. For the assumptions on which the financial results forecast is based, cautions on the use of the forecast, and other information, please refer to 1. Quantitative Information on Quarterly Financial Results for the Period under Review, (3) Explanation of Financial Results Forecast and Other Forward-looking Information on page 3 of the Attachment.

(Access to supplementary explanatory materials on financial results)

The supplementary explanatory materials on financial results are disclosed on TDnet today and are also available on the Company's website.

Table of Contents - Attachment
1. Quantitative Information on Quarterly Financial Results for the Period under Review .....................	2
(1)	Explanation of Operating Results ...................................................................................................	2
(2)	Explanation of Financial Position ...................................................................................................	3
(3)	Explanation of Financial Results Forecast and Other Forward-looking Information .....................	3
2. Quarterly Non-consolidated Financial Statements and Principal Notes ..............................................	4
(1)	Quarterly Non-consolidated Balance Sheets ...................................................................................	4
(2)	Quarterly Non-consolidated Statements of Income ........................................................................	6
	Three Months Ended May 20 .......................................................................................................	6
(3)	Notes to the Quarterly Non-consolidated Financial Statements ......................................................	7
	(Notes on going concern assumption) ........................................................................................	7
	(Notes in case of significant changes in shareholders' equity) ...................................................	7
	(Changes in accounting policies) ................................................................................................	7
	(Segment information, etc.) ........................................................................................................	8
	(Matters related to revenue recognition) ....................................................................................	8

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1. Quantitative Information on Quarterly Financial Results for the Period under Review

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020; hereinafter the "Revenue Recognition Standard"), etc. from the beginning of the first quarter of the fiscal year under review. Therefore, the financial results for the three months ended May 20, 2022, are discussed without mentioning the increase or decrease in figures or year-on-year percentage changes (%) compared to the same period of the previous fiscal year. Details are explained in "2. Quarterly Non-consolidatedFinancial Statements and Principal Notes, (3) Notes to the Quarterly Non-consolidatedFinancial Statements, (Changes in accounting policies)."

1. Explanation of Operating Results
   The Japanese economy during the three months ended May 20, 2022, saw a recovery in consumption, as people began to move around again in response to the decline in the number of new COVID-19 cases and the lifting of priority preventive measures. Meanwhile, the future outlook remained uncertain due primarily to the Russian invasion of Ukraine, the exchange rate turbulence following a shift in the US monetary policy, and the rise in the prices of fuels, raw materials, and other commodities.
   In the bicycle industry, the growth in demand that had continued until the previous fiscal year on the back of COVID-19 pandemic has taken a turn around. This can be attributed to several factors, such as the double- digit drop compared to the previous fiscal year in import volume of almost all types of bicycles, including general bicycles and children's bicycles, owing to the disruption in the physical distribution of goods caused by the lockdown in China, and the rise in purchasing costs of bicycles resulting from the hike in resource prices and marine transportation costs, which has prompted manufacturers to raise selling prices. Sports cycles, especially popular items, remained in short supply due to ongoing stock-out of parts that are in undersupply from parts manufacturers. Meanwhile, demand for electric assist bicycles remained at a high level, if slightly weaker in terms of growth rate.
   The Company focused on securing in a planned manner the stock of popular bicycles for commuting to work or school in preparation for the spring demand season, making use of its network of logistics warehouses located in key regions across the country. Looking at the trends by product category, sales of sports cycles declined due to substantial price revisions undertaken by brands other than the Company, while the sales of general bicycles saw a reversal of downward trend thanks to the abundant stock we had in different price ranges. Some bicycle types were faced with consumers' reluctance to buy new bikes; the sales of children's bicycles, which had been declining from the high levels recorded during the COVID-19 pandemic, slowed down further. The numbers of maintenance and repair orders are on the rise, however, and the Company, taking advantage of its forte of specialist expertise, posted an increase in income from services, which resulted in net sales as a whole exceeding the amount recorded in the same period of the previous fiscal year.
   On the new product front, the Company further expanded its product line by launching "ENERSYS every," an addition to its own electric assist bicycle brand "ENESYS," in April. The new product features upgraded functions aimed at making it fit for ride with comfort for a broad range of everyday uses from outing, shopping to pick up and drop off of children.
   Regarding store openings, the Company opened three new stores in the Kanto region and one in the Kyushu region. As a result, the total number of stores at the end of the first quarter of the fiscal year under review was 509, consisting of 490 directly operated stores and 19 franchise stores.
   As a result of the above activities, net sales for the three months ended May 20, 2022, was ¥24,246,108 thousand (¥24,153,579 thousand for the same period of the previous fiscal year). Operating profit was ¥3,440,910 thousand (¥4,236,679 thousand for the same period of the previous fiscal year), ordinary profit was ¥3,455,005 thousand (¥4,326,954 thousand for the same period of the previous fiscal year), and profit was ¥2,349,976 thousand (¥2,956,452 thousand for the same period of the previous fiscal year).
   Segment information is omitted as the Company has only one segment.

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