SPRIX : Consolidated Financial Results for the Nine Months Ended June 30, 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.

August 9, 2022

Consolidated Financial Results

for the Nine Months Ended June 30, 2022

[Under Japanese GAAP]

Company name:	SPRIX, Ltd.
Stock exchange listings:	Tokyo Stock Exchange
Securities code number:	7030
URL:	https://sprix.jp/
Representative:	Hiroyuki Tsuneishi, Representative Director and President
Contact:	Masafumi Shitara, General Manager
Telephone number:	(81) 3-6912-7058
Scheduled date for submission of
securities report:	August 9, 2022
Scheduled date for dividend payment:	－
Availability of supplementary information
for the quarterly financial results:	Yes
Organization of briefing on the quarterly
financial results:	None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the nine months ended June 30, 2022 (from October 1, 2021 to June 30, 2022)

(1) Consolidated operating results (cumulative)

(Percentage indicate year-on-year changes.)

Nine months	Net Sales		Operating profit		Ordinary profit		Profit attributable to
ended				owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of	%
	yen
June 30, 2022	21,109	25.3	1,211	-13.0	1,215	-12.8	741	-5.9
June 30, 2021	16,846	99.6	1,392	10.9	1,393	11.1	788	-12.1
(Reference) Comprehensive income		For the nine months ended June 30, 2022: 734 million yen ( -4.9%)
			For the nine months ended June 30, 2021: 772 million yen (-13.3%)
Nine months	Basic earnings	Diluted earnings
ended	per share		per share
		Yen		Yen
June 30, 2022		43.29		41.97
June 30, 2021		45.84		44.54

(Note) SPRIX, Ltd. (the "Company") applied accounting standards for revenue recognition, including the ASBJ Statement No. 29 Accounting Standard for Revenue Recognition issued on March 31, 2020, starting from October 1, 2021, the beginning date of the first quarter ended December 31, 2021. Accordingly, financial results for the nine months ended June 30, 2022, are reported in amounts after applying the accounting standards.

(2) Consolidated financial position

	Total assets	Net assets	Equity-to-asset ratio
As of	Millions of yen	Millions of yen	%
June 30, 2022	17,445	8,899	50.8
September 30, 2021	19,277	8,864	45.9
(Reference) Equity	As of June 30, 2022	:8,868 million yen
	As of September 30, 2021	:8,846 million yen

(Note) The Company applied accounting standards for revenue recognition, including the ASBJ Statement No. 29 Accounting Standard for Revenue Recognition issued on March 31, 2020, starting from October 1, 2021, the beginning date of the first quarter ended December 31, 2021. Accordingly, financial results for as of June 30, 2022, are reported in amounts after applying the accounting standards.

2. Cash dividends

Annual dividends per share

First

Second

Third

Fiscal year-end

Total

quarter-end

quarter-end

quarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

−

15.00

−

21.00

36.00

September 30, 2021

Fiscal year ending

−

19.00

−

September 30, 2022

Fiscal year ending

−

19.00

38.00

September 30, 2022 (forecast)

(Note) Changes from the latest announced dividend forecast: None

3. Consolidated forecasts for the fiscal year ending September 30, 2022 (From October 1, 2021 to September 30, 2022)

(Percentage indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
Fiscal year ending	Millions of	%	Millions of	%	Millions of	%	Millions of	%
yen	yen	yen	yen	Yen
September 30, 2022	29,546	14.1	2,699	10.8	2,706	11.2	1,755	19.6	102.45

(Note 1) Changes from the latest announced consolidated forecasts: None

(Note 2) The Company applied accounting standards for revenue recognition, including the ASBJ Statement No. 29 Accounting Standard for Revenue Recognition issued on March 31, 2020, starting from October 1, 2021, the beginning date of the first quarter ended December 31, 2021. Accordingly, the forecasts stated above are reported in amounts after applying the accounting standards.

• Notes

1. Changes in significant subsidiaries during the nine months ended June 30, 2022 (changes in specified subsidiaries resulting in change in scope of consolidation): None
   Newly included : None

Excluded : None

1. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and restatement a. Changes in accounting policies due to revision in accounting standards :Yes

b. Changes in accounting policies due to other reasons	:None
c. Changes in accounting estimates	:None
d. Restatements	:None

1. Number of issued and outstanding shares (common shares)

a. Number of issued and outstanding shares (including treasury shares)

As of June 30, 2022	:17,485,950 shares
As of September 30, 2021	:17,473,950 shares
b. Number of treasury shares
As of June 30, 2022	:345,285 shares
As of September 30, 2021	:345,245 shares

c. Average number of issued and outstanding shares during the period (cumulative from the beginning of the

fiscal year)
Nine months ended June 30, 2022	:17,136,606 shares
Nine months ended June 30, 2021	:17,200,067 shares

• Quarterly financial results are exempt from quarterly reviews conducted by certified public accountants or an audit firm.
• Explanation for the appropriate use of the forecasts and other matters to be noted
  The forecasts for results of operations and other forward-looking information in this report are based on information currently available to the Company and assumptions determined to be reasonable. They are not intended as the Company's commitment to achieve such forecasts.
  Further, actual results may differ significantly from the forecasts due to various reasons. For assumptions that form the basis of the forecasts and other related matters when referring to the forecasts, see "1. QUALITATIVE INFORMATION ON QUARTERLY FINANCIAL RESULTS, (3) Explanation Regarding the Forecasts for the Consolidated Financial Results" in the attached Supplementary Information on page 4.
  The amounts stated in the Company's quarterly consolidated financial statements and related notes were originally presented in thousand-yen units. However, effective from the first quarter ended December 31, 2021, such amounts are replaced with million-yen units. Note that amounts for the previous fiscal year and the previous quarter ended June 30, 2021, are also restated in million-yen units.

Supplementary Information

Table of Contents
1. QUALITATIVE INFORMATION ON QUARTERLY FINANCIAL RESULTS	2
(1) Overview of Consolidated Operating Results	2
(2) Overview of Consolidated Financial Position	4
(3) Explanation Regarding the Forecasts for the Consolidated Financial Results	4
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES	5
(1) Quarterly Consolidated Balance Sheet	5
(2) Quarterly Consolidated Statements of Income and Comprehensive Income	7
[Quarterly Consolidated Statement of Income]	7
[Quarterly Consolidated Statement of Comprehensive Income ]	8
(3) Notes to the Quarterly Consolidated Financial Statements	9
[Notes Regarding Uncertainties of Entity's Ability to Continue as Going Concern]	9
[Notes When There are Significant Changes in Amounts of Equity]	9
[Changes in Accounting Policies]	9
[Segment Information]	10
[Significant Events after Reporting Period]	11

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1. QUALITATIVE INFORMATION ON QUARTERLY FINANCIAL RESULTS

1. Overview of Consolidated Operating Results

The economy in Japan during the nine months ended June 30, 2022 (the "current period"), started to recover from the COVID-19 shock. However, downside economic risks, including soaring raw material prices and unstable financial markets, need to be carefully monitored amid the uncertainties around the globe, such as Russian invasion in Ukraine.

The Japanese education service industry, in which the Company and its subsidiaries (the "Group) are engaged, is required to take swift actions to address various impending issues, including declining birthrate, hiring difficulties and regional disparities. Further, as many industries are forced to transform their businesses from analog to digital and reassess their service lines amid the pandemic, the education service industry is also exploring different ways of delivering academic services to meet an increasing demand for utilizing information technology (IT) in education and teaching.

Under such circumstances, the Group determined to strengthen and streamline the operation management of the educational service business by each business model and reassess the management method of Group businesses. Starting from the first quarter ended December 31, 2021, the Group classified its businesses into three reportable segments, namely "Mori JUKU," "Shonan Seminar," and "Kawaijuku Manavis" Segment information is provided accordingly.

The Group acquired the entire shares of Shonan Seminar CO., LTD. (or "Shonan") as a wholly-owned subsidiary as of December 31, 2020. Accordingly, the subsidiary's operating results for the first quarter ended December 31, 2020, are not included in amounts for the period of nine months ended June 30, 2021.

"Mori JUKU," the Group's core business specialized in offering individual tutoring cram schools, ran 191 schools as of June 30, 2022, up 16 schools year-on-year, comprising 146 schools run by the Company, up 16 schools year-on-year, and 45 schools run by Shonan, no changes year-on-year. Mori JUKU business remained stable during the current period as the number of newly enrolled students continued to grow even under the difficult time of COVID-19, while the number of drop-out students saw a declining trend. As a result, the number of enrolled students for Mori JUKU, including those run by Shonan, totaled 40,648, up 2,023 year-on-year as of June 30, 2022. Of the 40,648 enrolled students, 31,749 students belonged to Mori JUKU run by the Company, an increase of 1,866 students from a year earlier, and 8,899 students to Mori JUKU run by Shonan, an increase of 157 students from a year earlier.

"Shonan Seminar" offers group teaching-style classes mainly to elementary and junior high school students. As of June 30, 2022, 181 Shonan Seminar schools were run by Shonan, up three schools year-on-year.

"Kawaijuku Manavis" specializes in teaching senior high school students to prepare for college entrance exams using both video sessions and face-to-face tutoring. As of June 30, 2022, 48 schools were run by Shonan under a franchise, up one school from a year earlier.

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