Serverworks : Summary of Consolidated Financial Results for the Six Months Ended August 31, 2021

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Six Months Ended August 31, 2021 (Based on Japanese GAAP)

					October 15, 2021
Company name:	Serverworks Co.,Ltd.
Stock exchange listing:	Tokyo
Stock code:	4434	URL https://www.serverworks.co.jp/
Representative:	Representative Director, President	Ryo Oishi
Inquiries:	Director		Hiroyuki Oshio	TEL [phone]
Scheduled date to file Quarterly Securities Report:	October 15, 2021
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes	(for institutional investors and analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended August 31, 2021 (from March 1, 2021 to August 31, 2021)

(1) Consolidated operating results (cumulative)									Percentages indicate 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		%
Six months ended August 31, 2021	5,088		-		364		-		362		-			246		-
Six months ended August 31, 2020	-		-			-		-		-		-			-		-
	Earnings per share		Diluted earnings per share
			Yen						Yen
Six months ended August 31, 2021			32.24						31.11
Six months ended August 31, 2020				-						-
(2) Consolidated financial position
	Total assets				Net assets		Equity ratio
	Millions of yen			Millions of yen				%
As of August 31, 2021		10,859						9,021				83.1
As of February 28, 2021			-						-				-
2. Cash dividends
						Annual dividends per share
	1st quarter-end	2nd quarter-end		3rd quarter-end	Fiscal year-end	Total
	Yen				Yen			Yen				Yen			Yen
Year ended February 28, 2021		-			0.00				-				0.00			0.00
Year ending February 28, 2022		-			0.00
Year ending February 28, 2022 (Forecast)										-				0.00			0.00

3. Forecast of consolidated financial results for the year ending February 28, 2022 (from March 1, 2021 to February 28, 2022)

Percentages indicate year-on-year changes

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Earnings per share
				owners of parent
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
Full year	10,212	-	420		-	443		-	319		-	41.79

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4. Notes

1. Changes in significant subsidiaries during the six months ended August 31, 2021 (changes in specified subsidiaries resulting in the change in scope of consolidation):
2. Application of special accounting methods for preparing quarterly consolidated financial statements:

No

Yes

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:	No
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(4) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of August 31, 2021	7,671,484	shares	As of February 28, 2021	7,588,044	shares
Number of treasury shares at the end of the period
	As of August 31, 2021	340	shares	As of February 28, 2021	340	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Six months ended August 31, 2021	7,647,707	shares	Six months ended August 31, 2020	6,892,036	shares

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Quarterly consolidated financial statements

Consolidated balance sheets

		(Thousands of yen)
		As of August 31, 2021
Assets
Current assets
Cash and deposits	6,695,435
Accounts receivable - trade	1,469,392
Work in process	60,546
Other	248,245
Allowance for doubtful accounts	(1,917)
Total current assets	8,471,703
Non-current assets
Property, plant and equipment	67,978
Intangible assets	108,583
Investments and other assets
Investment securities	2,052,403
Shares of subsidiaries and associates	82,735
Other	76,537
Total investments and other assets	2,211,677
Total non-current assets	2,388,238
Total assets	10,859,942
Liabilities
Current liabilities
Accounts payable - trade	1,032,795
Income taxes payable	133,826
Provision for bonuses	60,698
Provision for loss on order received	6,926
Other	319,990
Total current liabilities	1,554,236
Non-current liabilities
Deferred tax liabilities	270,338
Asset retirement obligations	14,310
Total non-current liabilities	284,648
Total liabilities	1,838,885
Net assets
Shareholders' equity
Share capital	3,213,638
Capital surplus	3,203,638
Retained earnings	1,866,606
Treasury shares	(1,866)
Total shareholders' equity	8,282,017
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	739,038
Total accumulated other comprehensive income	739,038
Total net assets	9,021,056
Total liabilities and net assets		10,859,942

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Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

		(Thousands of yen)
		Six months ended
		August 31, 2021
Net sales	5,088,901
Cost of sales	4,224,103
Gross profit	864,798
Selling, general and administrative expenses	500,069
Operating profit	364,728
Non-operating income
Share of profit of entities accounted for using equity method	4,969
Other	34
Total non-operating income	5,004
Non-operating expenses
Foreign exchange losses	5,038
Other	1,752
Total non-operating expenses	6,790
Ordinary profit	362,942
Extraordinary losses
Special executive bonuses	10,000
Other	35
Total extraordinary losses	10,035
Profit before income taxes	352,906
Total income taxes	106,314
Profit	246,591
Profit attributable to owners of parent		246,591

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Consolidated statements of comprehensive income (cumulative)

	(Thousands of yen)
	Six months ended
	August 31, 2021
Profit	246,591
Other comprehensive income
Valuation difference on available-for-sale securities	(132,002)
Total other comprehensive income	(132,002)
Comprehensive income	114,589
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	114,589

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