NEOJAPAN : Consolidated Financial Results for the Fiscal Year Ended January 31, 2022

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results

for the Fiscal Year Ended January 31, 2022

[Japanese GAAP]

March 17, 2022

Company name: NEOJAPAN Inc.

Stock exchange listing: Tokyo Stock Exchange

Code number: 3921

URL: https://www.neo.co.jp/en/

Representative: Akinori Saito, Representative Director

Contact: Makoto Tokiwa, Director in Charge of Accounting and Finance

Phone: [phone]

Scheduled date of annual general meeting of shareholders: April 26, 2022

Scheduled date of commencing dividend payments: April 27, 2022

Scheduled date of filing securities report: April 27, 2022

Preparation of supplementary materials on annual financial results: Yes

Schedule of annual financial results briefing session: Scheduled (for institutional investors (online))

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

1. Consolidated Financial Results for the Fiscal Year Ended January 31, 2022 (February 1, 2021-January 31,

2022)
(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	January 31, 2022	5,920	11.2	1,247	35.5	1,361	43.5	866	27.9
	January 31, 2021	5,325	42.3	920	31.7	948	32.3	677	36.8

(Note) Comprehensive income: Fiscal year ended January 31, 2022: ¥903 million [36.0%]

Fiscal year ended January 31, 2021: ¥664 million [30.2%]

Basic earnings

Diluted

Return on

Ratio of

Ratio of

earnings

ordinary profit

operating profit

per share

equity

per share

to total assets

to net sales

Fiscal year ended

Yen

Yen

%

%

%

January 31, 2022

58.17

57.97

18.1

19.4

21.1

January 31, 2021

45.58

45.32

16.4

15.1

17.3

(Reference) Equity in earnings of affiliated companies: Fiscal year ended January 31, 2022: ¥- million

Fiscal year ended January 31, 2021: ¥- million

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of January 31, 2022

7,287

5,165

70.7

345.53

As of January 31, 2021

6,742

4,431

65.6

296.83

(Reference) Equity: As of January 31, 2022: ¥5,151 million

As of January 31, 2021: ¥4,420 million

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash

equivalents

operating activities

investing activities

financing activities

at year-end

Fiscal year ended

Million yen

Million yen

Million yen

Million yen

January 31, 2022

1,107

(326)

(255)

4,059

January 31, 2021

989

(227)

(142)

3,418

2. Dividends

		Annual dividends			Total			Ratio of
							Payout ratio		dividends to
	1st	2nd	3rd	Year-			dividends
	quarter-	quarter-	quarter-	Total		(consolidated)		net assets
	end		(annual)
	end	end	end					(consolidated)
	Yen	Yen	Yen	Yen	Yen		Million yen	%	%
Fiscal year ended	-	0.00	-	11.00	11.00	163	24.1	4.0
January 31, 2021
Fiscal year ended	-	0.00	-	14.00	14.00	208	24.1	4.4
January 31, 2022
Fiscal year ending
January 31, 2023	-	0.00	-	16.00	16.00			25.9
(Forecast)

3. Consolidated Financial Results Forecast for the Fiscal Year Ending January 31, 2023 (February 1, 2022- January 31, 2023)

(% indicates changes from the previous corresponding period.)

							Profit attributable	Basic earnings
	Net sales		Operating profit	Ordinary profit	to owners of
		per share
							parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	6,271	5.9	1,271	1.9	1,359	(0.1)	920	6.3	61.77

* Notes:

(1) Changes in significant subsidiaries during the period under review: None (Changes in specified subsidiaries resulting in changes in the scope of consolidation)

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
3. Total number of issued and outstanding shares (common shares)
4. 1. Total number of issued and outstanding shares at the end of the period (including treasury shares):

January 31, 2022:	14,908,800 shares
January 31, 2021:	14,892,000 shares
2) Total number of treasury shares at the end of the period:
January 31, 2022:	223 shares
January 31, 2021:	223 shares
3) Average number of shares during the period:
Fiscal year ended January 31, 2022:	14,893,989 shares
Fiscal year ended January 31, 2021:	14,856,000 shares

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended January 31, 2022 (February 1, 2021-January

31, 2022)
(1) Non-consolidated Operating Results					(% indicates changes from the previous corresponding period.)
				Net sales				Operating profit		Ordinary profit		Profit
	Fiscal year ended		Million yen	%	Million yen	%		Million yen	%		Million yen	%
	January 31, 2022		3,926	13.4		1,165	50.9		1,270	61.0		806	39.8
	January 31, 2021		3,462	12.3		772	19.9		789	19.2		577	25.1
			Basic earnings		Diluted earnings
			per share			per share
	Fiscal year ended			Yen					Yen
	January 31, 2022		54.18			54.00
	January 31, 2021		38.85			38.63
(2) Non-consolidated Financial Position
				Total assets			Net assets	Equity ratio	Net assets per share
				Million yen			Million yen		%			Yen
	As of January 31, 2022			6,718			4,971		74.0		333.46
	As of January 31, 2021			6,018			4,289		71.3		288.07

(Reference) Equity: As of January 31, 2022: ¥4,971 million As of January 31, 2021: ¥4,289 million

• These financial results are outside the scope of audit by certified public accountants or an audit firm.
• Explanation of the proper use of financial results forecast and other notes
  The earnings forecasts and other forward-looking statements herein are based on information currently available to the Group and certain premises that the Group deems to be reasonable, and are not guarantees of future performance. Actual results may differ significantly from these forecasts due to a wide range of factors.

Table of Contents - Attachments
1. Analysis of Operating Results and Financial Position .........................................................................	2
(1) Analysis of Operating Results .........................................................................................................	2
(2) Analysis of Financial Position .........................................................................................................	5
(3) Analysis of Cash Flows .....................................................................................................................	6
(4)	Future Outlook ................................................................................................................................	7
2. Basic Policy on Selection of Accounting Standards ............................................................................	8
3. Consolidated Financial Statements and Principal Notes .....................................................................	9
(1)	Consolidated Balance Sheets ...........................................................................................................	9
(2)	Consolidated Statements of Income and Comprehensive Income ................................................	11
(3)	Consolidated Statements of Changes in Equity .............................................................................	13
(4)	Consolidated Statements of Cash Flows .......................................................................................	15
(5)	Notes to Consolidated Financial Statements .................................................................................	17
	(Notes on going concern assumption) ......................................................................................	17
	(Changes in presentation) ...........................................................................................................	17
	(Additional information) ..........................................................................................................	17
	(Segment information, etc.) ......................................................................................................	18
	(Per share information) .............................................................................................................	22
	(Significant subsequent events) ................................................................................................	22

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1. Analysis of Operating Results and Financial Position

(1) Analysis of Operating Results

The Japanese economy in the fiscal year ended January 31, 2022 remained in an uncertain situation due to a rebound of COVID-19 cases from January 2022, while economic activities were expected to return to normal following the lifting of the state of emergency and quasi-emergency measures at the end of September 2021 and the progress in vaccine rollout. The ASEAN region, where our subsidiaries operate, continued to face a severe situation as well, due to a rebound of COVID-19 cases.

The IT industry, to which the Group belongs, has seen the spread of unconventional workstyles. For example, businesses are formally instituting and keeping in place remote working arrangements that have been temporarily introduced as measures against COVID-19. Interests in investing in IT to enable efficient and smooth operations in such an environment are expected to remain high.

Under such circumstances, desknet's NEO Schedule App was updated in March 2021. Functions of ChatLuck were extended in May 2021 to establish an environment that ensures secure external communication for local governments, financial institutions, and other organizations working in a network environment separated from the internet for security reasons. In June 2021, we developed and provided ChatLuck SC, a safe, secure, affordable, and simple tool for communication between schools and parents, as a joint project with independent data center provider I-NET CORP. In September 2021, we released desknet's NEO version 6.1, equipped with the new SmartViewer function to achieve paperless meetings and a FAQ system using AI technology. Furthermore, we released ChatLuck version 4.5 in December 2021, further strengthening the cooperation with external systems such as single sign-on and chatbot. In December 2021, we also developed and provided the "Tsukuba City COVID-19 Vaccine Delivery System" and "Vaccine Quantity Management Form" using desknet's NEO and AppSuite to Tsukuba City, Ibaraki Prefecture. In addition, we have started an initiative that allows local governments with similar issues to use the template introduced in Tsukuba City, and to provide it only with the usage fee of the cloud service. We will continue to make efforts so that we can contribute to solving social issues through the business activities of the Group.

In February 2021, we received the Encouragement Award at the 21st Telework Promotion Awards (Telework Promotion Category) from the Japan Telework Association, in recognition of our efforts to go paperless, review the workflow, and use a combination of chat tools to facilitate business process improvement when teleworking. In January 2022, our groupware desknet's NEO was recognized as "Leader" for the 12th consecutive period in the Groupware Category and Workflow Category of the ITreview Grid Award 2022 Winter, organized by IT product comparison and review website ITreview. Our business chat tool ChatLuck was recognized as "High Performer" for the 6th consecutive period in the Business Chat Category.

DELCUI Inc., which was a non-consolidated subsidiary until the previous fiscal year, has been included in the scope of consolidation since the fiscal year under review, due to its increased materiality as it started full- fledged operation. Newly established NEO THAI ASIA Co., Ltd. has also been included in the scope of consolidation since the first quarter of the current fiscal year.

As a result, for the fiscal year ended January 31, 2022, the Company posted net sales of ¥5,920,092 thousand (up 11.2% year on year), operating profit of ¥1,247,411 thousand (up 35.5% year on year), ordinary profit of ¥1,361,107 thousand (up 43.5% year on year), and profit attributable to owners of parent of ¥866,326 thousand (up 27.9% year on year).

Operating results for the fiscal year ended January 31, 2022 by segment are as follows.

2