Ohsho Food Service : 〔Delayed〕 Consolidated Financial Results for the third Quarter of the Fiscal Year Ended March 31, 2022

		January 31, 2022
	Summary of Consolidated Financial Results
	for the Third Quarter of the Fiscal Year Ending March 31, 2022 (FY3/22)
	(Nine Months Ended December 31, 2021)
		[Japanese GAAP]
Company name:	OHSHO FOOD SERVICE CORP.	Listing: Tokyo Stock Exchange, First Section
Stock code:	9936	URL: https://www.ohsho.co.jp
Representative:	Naoto Watanabe, President
Contact:	Masahiro Inagaki, Director, Executive Officer, General Manager of Administration Division
	Headquarters
	Tel: [phone]

Scheduled date of filing of Quarterly Report:				February 14, 2022
Scheduled date of payment of dividend:				-
Preparation of supplementary materials for quarterly financial results:	None
Holding of quarterly financial results meeting:				None
			(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Third Quarter (April 1, 2021 - December 31, 2021) of FY3/22
(1) Consolidated results of operations				(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Nine months ended Dec. 31, 2021	62,758	3.7	5,021	8.6	10,036	100.6	7,014	118.1
Nine months ended Dec. 31, 2020	60,511	(5.3)	4,624	(22.7)	5,002	(20.6)	3,216	(25.1)

Note: Comprehensive income (millions of yen)	Nine months ended Dec. 31, 2021:	6,700	(up 88.1%)
		Nine months ended Dec. 31, 2020:	3,561	(down 34.7%)
	Net income per share	Diluted net income per share
		Yen		Yen
Nine months ended Dec. 31, 2021		373.55		-
Nine months ended Dec. 31, 2020		171.37		-
Note: Beginning with the first quarter of the current fiscal year, the Company has applied the Accounting Standard for Revenue

Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) and other standards. All figures for the nine months ended December 31, 2021 incorporate this accounting standard.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
As of Dec. 31, 2021	89,606	57,703	64.4
As of Mar. 31, 2021	91,154	52,952	58.1

Reference: Shareholders' equity (millions of yen) As of Dec. 31, 2021: 57,703 As of Mar. 31, 2021: 52,952

Note: Beginning with the first quarter of the current fiscal year, the Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and other standards. All figures as of December 31, 2021 incorporate this accounting standard.

2. Dividends

			Dividend per share
	1Q-end	2Q-end		3Q-end	Year-end	Total
	Yen	Yen		Yen	Yen	Yen
Fiscal year ended Mar. 31, 2021	-	50.00	-		50.00	100.00
Fiscal year ending Mar. 31, 2022	-	50.00	-
Fiscal year ending Mar. 31, 2022 (forecasts)						50.00	100.00

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

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentages represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per
		owners of parent	share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	83,854		4.0	6,989	15.1	11,465	66.9	7,799	81.9	415.30

Note: Revisions to the most recently announced consolidated forecasts: None

* Notes

1. Changes in consolidated subsidiaries during the period (changes in specified subsidiaries resulting in changes in the scope of consolidation): None

Newly added: -

Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting estimates, and restatements

1)	Changes in accounting policies due to revisions in accounting standards, others:	Yes
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting estimates:	None
4)	Restatements:	None

Note: Please refer to "Notes to Quarterly Consolidated Financial Statements" on page 11 of the attachments for further information.

(4) Number of outstanding shares (common shares)

1)	Number of shares outstanding at the end of the period (including treasury shares)
	As of Dec. 31, 2021:	23,286,230 shares	As of Mar. 31, 2021:	23,286,230 shares
2)	Number of treasury shares at the end of the period
	As of Dec. 31, 2021:	4,506,156 shares	As of Mar. 31, 2021:	4,514,166 shares
3) Average number of shares outstanding during the period
	Nine months ended Dec. 31, 2021:	18,776,868 shares	Nine months ended Dec. 31, 2020:	18,768,977 shares

• The current quarterly financial report is not subject to quarterly review procedures by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts, and other special items
  Forecasts of future performance in this document are based on assumption judged to be valid and information currently available to the Company's management, but are not promises by the Company regarding future performance. Actual results may differ materially from the forecasts for a number of reasons. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements" on page 5 for forecast assumptions and notes of caution for usage.

	OHSHO FOOD SERVICE CORP. (9936) Consolidated Financial Results for the Third Quarter of FY3/22
Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	4
(3)	Explanation of Consolidated Forecasts and Other Forward-looking Statements	5
2. Quarterly Consolidated Financial Statements and Notes	6
(1)	Quarterly Consolidated Balance Sheet	6
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	8
	Quarterly Consolidated Statement of Income
	For the Nine-month Period	8
	Quarterly Consolidated Statement of Comprehensive Income
	For the Nine-month Period	9
(3)	Quarterly Consolidated Statement of Cash Flows	10
(4)	Notes to Quarterly Consolidated Financial Statements	11
	Changes in Accounting Policies	11
	Going Concern Assumption	11
	Significant Changes in Shareholders' Equity	11

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OHSHO FOOD SERVICE CORP. (9936) Consolidated Financial Results for the Third Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

Summary of consolidated results of operations (April 1, 2021 to December 31, 2021)

	Amount	% to sales	12-month change	24-month change
	(millions of yen)
Net sales	62,758	100.0%	Up	3.7%	Down	1.8%
Operating profit	5,021	8.0%	Up	8.6%	Down 16.1%
Ordinary profit	10,036	16.0%	Up	100.6%	Up	59.3%
Profit attributable to owners of parent	7,014	11.2%	Up	118.1%	Up	63.4%

During the first nine months of the current fiscal year, the Japanese economy saw a personal consumption recovery as the country was past the peak of its fifth coronavirus wave in August 2021, which was driven by the rapid spread of the virus, and it was on the downward slope.

The restaurant industry's business conditions were on the way to improvement partly due to the lifting of restrictions on restaurants, allowing them to open as usual and serve alcohol. However, some formats that operate mainly at night were still in a challenging environment despite continued strong sales in the home meal replacement market that includes takeout meals at restaurants.

Under such circumstances, the Group has provided various online training programs and improved the level of quality, service, and cleanliness (QSC) in stores amid the COVID-19 pandemic, giving its highest priority to the protection of the safety and health of our customers and employees. The Group has been engaged in offering safer environment in order to cater our customers delicious meals that are essential part of everyday life.

As a result of such efforts, in-store sales steadily recovered after the government lifted the state of emergency and quasi-emergencyCOVID-19 measures. Meanwhile, sales of takeout and delivery services remained strong. As a result, continuing from the first half of the current fiscal year, the Group achieved year-on-year increases in both revenue and profit during the first nine months.

The following is an overview of our initiatives and achievements during the first nine months, described in line with four items, three primary strategies of sales strategy, restaurant opening strategy, and franchise chain promotion strategy in our medium-term management plan which has newly started with the current fiscal year, and sustainability activities.

1. Sales strategy
   Even after Japan's fifth wave of infections subsided in October 2021, we increased our efforts to further improve the level of QSC while continuing to take thorough measures to prevent our customers and employees from getting infected with coronavirus. By doing so, we have improved our sales system with a view to a post-COVID-19 world. After the government lifted its request for shorter operating hours nationwide, we actively conducted sales promotions to ensure an in-store sales recovery and tap into the demand for takeout and delivery services.
   To improve the level of QSC, we resumed cooking training programs in Ohsho Cooking Dojo (an in-house training program) while taking preventive measures against coronavirus. We concurrently continued to provide online training programs, allowing participants to thoroughly learn basic cooking methods. We also resumed once suspended cooking skill testing, helping employees further improve their cooking skills in a friendly rivalry. Besides the above initiatives, we provided training programs based on a new employee handbook designed to improve their customer service skills. We also made it common practice for store staff to ensure inside the stores is cleaned and sterilized so that customers can enjoy dining in the stores with peace of mind.
   For sales promotions, we launched the annual campaign "Gyoza Club customer appreciation campaign for 2022" in June, and held the "double stamp campaign" for a limited time. In November, we added three more gifts for the annual campaign with which children can enjoy, namely stationery sets, extracurricular activity bags, and card and board game sets, so that a wider range of customers can participate in the campaign.
   In December, we held a year-end and new-year customer campaign, during which customers collect six stamps and exchange them for one gyoza plate free of charge. We also held another campaign to celebrate the

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OHSHO FOOD SERVICE CORP. (9936) Consolidated Financial Results for the Third Quarter of FY3/22

anniversary of our founding for two days on December 24 and 25, during which we distributed a 250-yen discount coupon per 500 yen paid at the cashier. The coupon was the reprinted version of the coupon at the time of our founding. Both of the campaigns were well received by our customers.

For takeout services, we continued to hold an uncooked gyoza stamp campaign and a sale of uncooked gyoza. For delivery services, we have increased the number of stores that can provide delivery services from 366 at the end of March 2021 to 443 for directly operated stores. Including franchised stores, the number of such stores rose from 413 to 546. We have also increased stores providing the delivery services with the three food delivery operators: Demae-Can, Uber Eats, and menu. These initiatives to stimulate demand and efforts to offer customers more convenience helped keep strong sales in takeout and delivery services.

As a result, we achieved the record high monthly sales of all stores on a year-on-year basis for three consecutive months from October to December during the first nine months. On December 11, we achieved the record high daily sales of directly operated stores at 327 million yen.

1. Restaurant opening strategy
   During the first nine months, we opened five directly operated stores.
   These new five stores are located in areas with considerable potential for successful store openings in view of the market size, neighborhood economic environment, and other factors. The stores have been designed with a focus on thorough measures to prevent COVID-19 infection and convenience for customers to use takeout and delivery services.
   One of the new stores is a roadside store named Kendo-377go-Yoshikawa-Sakae store. We opened it in Yoshikawa City, Saitama Prefecture, whose population is increasing remarkably as a large shopping mall was open. This store has the largest area among stores in the Kanto area.
   Another one of the new stores is a roadside store named Kendo-243go-Ryugasaki store. It is located in an area with a lower population density than the Greater Tokyo area, but expected to create synergistic effects with a supermarket and other shops located around the store within the same premises.
   In an effort with local retailers, we opened sanwa Fujigaoka store in Kanagawa Prefecture and two stores in Fukuoka Prefecture, named SunLive Create Munakata store and Kokudo-202go-Itoshima store. All of which are expected to create synergistic effects through tie-ups with local retailers that offer groceries and daily necessities, which are expected to attract many customers.
2. Franchise chain promotion strategy
   On October 1, we placed the FC Promotion Department responsible for FC business under the Sales Division Headquarters responsible for directly operated stores. We also strengthened partnership with our franchised stores. In this way, we have established a system that allows directly operated stores and franchised stores to work together to enhance the brand value of Gyoza no Ohsho.
   We made training sessions, which are held by Ohsho University (our in-house educational institution) and Ohsho Cooking Dojo, available to franchise owners, restaurant managers, and future candidates for such posts. This enabled them to improve their know-how about franchise store operations and their cooking skills. In addition, our franchise consultants periodically make the rounds of franchised stores to check the level of QSC of each franchised store and clarify areas for improvement. We sought to make quality standards of Ohsho penetrating into the stores by working on the areas for improvement in cooperation with franchise owners.
   We have actively conducted sales promotions in line with those conducted in directly operated stores, and lifted the service level of franchised stores to the same level of directly operated stores that provide delivery and EPARK Takeout services and take credit cards. These efforts helped drive customer traffic to stores in the challenging environment.
   Such positive outcome helped each franchised store keep their strong sales. Sales of shipments dispatched from our factories to franchised stores remained on the upward trend.
3. Sustainability initiatives
   As a company contributing to society through food, we offered a total of 32,000 meals of "Bento for Kids" free of charge to Kodomo Shokudo (Children's Meals) and other similar groups nationwide last summer. This initiative received many strong requests from children nationwide, wishing to have Bento for Kids again.

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