Tobila : Non-consolidated Financial Results for the Fiscal Year Ended October 31, 2021

(Percentages represent year-on-yearchanges)

Non-consolidated Financial Results for the Fiscal Year Ended October 31, 2021

		[Japanese GAAP]
Company name: Tobila Systems Inc.	December 10, 2021
Listing: Tokyo Stock Exchange, First Section
Securities code:	4441	URL: https://tobila.com
Representative:	Atsushi Akita, Representative Director and President
Contact:	Toshihito Goto, Managing Director and CFO
	Tel: [phone]

Scheduled date of Annual General Meeting of Shareholders:	January 20, 2022
Scheduled date of payment of dividend:	January 6, 2022
Scheduled date of filing of Annual Securities Report:	January 20, 2022
Preparation of supplementary materials for financial results:	Yes
Holding of financial results meeting:	Yes
	(All amounts are rounded down to the nearest million yen)

1. Non-consolidated Financial Results for the Fiscal Year Ended October 31, 2021 (November 1, 2020 - October 31, 2021)

(1) Results of operations

				Net sales		Operating profit				Ordinary profit					Profit
		Million yen		%		Million yen			%		Million yen			%		Million yen	%
Fiscal year ended Oct. 31, 2021		1,424		15.4		579		16.3		577			22.7					386	19.8
Fiscal year ended Oct. 31, 2020		1,234		25.7		498		22.8		471			20.0					322	29.6
		Net income per				Diluted net	Return on equity		Ordinary profit		Operating profit
				share			income per share		on total assets			to net sales
					Yen					Yen					%							%					%
Fiscal year ended Oct. 31, 2021		37.25				36.47					27.2							30.3					40.7
Fiscal year ended Oct. 31, 2020		31.30				30.20					27.5							31.9					40.4
Reference: Equity in earnings of affiliates (million yen)	Fiscal year ended Oct. 31, 2021: -	Fiscal year ended Oct. 31, 2020: -
(2) Financial position
			Total assets		Net assets				Equity ratio				Net assets per share
				Million yen			Million yen								%							Yen
As of Oct. 31, 2021				2,170				1,489								68.6							143.30
As of Oct. 31, 2020				1,647				1,347								81.7							129.71
Reference: Shareholders' equity (million yen) As of Oct. 31, 2021:	1,489			As of Oct. 31,	2020:		1,347
(3) Cash flows
		Cash flows from			Cash flows from	Cash flows from		Cash and cash equivalents
		operating activities			investing activities	financing activities				at end of period
				Million yen			Million yen				Million yen							Million yen
Fiscal year ended Oct. 31, 2021				491			(652)						45									1,145
Fiscal year ended Oct. 31, 2020				358			(123)						(15)									1,218
2. Dividends
					Dividend per share						Total		Payout ratio		Dividend on
		1Q-		2Q-		3Q-
						Year-end			Total		dividends			equity
		end		end		end
		Yen		Yen		Yen			Yen				Yen		Million yen				%			%
Fiscal year ended Oct. 31, 2020		-		0.00	-			10.80		10.80				112				34.5			9.5
Fiscal year ended Oct. 31, 2021		-		0.00	-			12.90		12.90				134				34.6			9.5
Fiscal year ending Oct. 31,		-		0.00	-			11.10		11.10									34.6
2022 (forecasts)

3. Earnings Forecast for the Fiscal Year Ending October 31, 2022 (November 1, 2021 - October 31, 2022)

(Percentages represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit		Net income
			per share
	Million yen		%	Million yen	%	Million yen	%	Million yen		%	Yen
First half	786		13.3	228	(20.0)	220	(23.0)	146		(25.7)	14.12
Full year	1,636		14.8	513	(11.5)	504	(12.8)	333		(13.7)	32.05

* Notes

1. Changes in accounting policies and accounting-based estimates, and restatements
2. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
3. Number of outstanding shares (common shares)
4. 1. Number of shares outstanding at the end of the period (including treasury shares)

As of Oct. 31, 2021:	10,479,900 shares	As of Oct. 31, 2020:	10,385,400 shares
2) Number of treasury shares at the end of the period
As of Oct. 31, 2021:	89,150 shares	As of Oct. 31, 2020:	50 shares
3) Average number of shares outstanding during the period
Fiscal year ended Oct. 31, 2021:	10,364,669 shares	Fiscal year ended Oct. 31, 2020:	10,298,193 shares

• The current financial report is not subject to audit by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts, and other special items

Cautionary statement with respect to forward-looking statements

Forecasts of future performance in these materials are based on assumptions judged to be valid and information available to Tobila Systems' management at the time these materials were prepared, but are not promises by Tobila Systems regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to "1. Overview of Results of Operations, (4) Outlook" on page 4 for forecast assumptions and notes of caution for usage.

		Tobila Systems Inc. (4441) Financial Results for FY10/21
Contents of Attachments
1. Overview of Results of Operations	2
(1)	Results of Operations	2
(2)	Financial Position	3
(3)	Cash Flows	3
(4)	Outlook	4
2. Basic Approach for the Selection of Accounting Standards	4
3. Non-consolidated Financial Statements and Notes	5
(1)	Non-consolidated Balance Sheet	5
(2)	Non-consolidated Statement of Income	7
(3)	Non-consolidated Statement of Changes in Equity	8
(4)	Non-consolidated Statement of Cash Flows	10
(5)	Notes to Non-consolidated Financial Statements	11
	Going Concern Assumption	11
	Equity in Earnings of Affiliates	11
	Segment and Other Information	11
	Per-share Information	15
	Subsequent Events	15

1

Tobila Systems Inc. (4441) Financial Results for FY10/21

1. Overview of Results of Operations

(1) Results of Operations

The Japanese economy is still in a challenging situation because of the introduction of various restrictions to curb COVID-19 infections. With vaccinations in full swing, the economy is expected to pick up, but the outlook remains uncertain.

When the Tokyo Olympics began in July 2021, phishing scams emerged aiming to trick people into entering their credit card details under the guise of being a live Olympic broadcast. This fall, there were phishing scams using the short message service, in which gift cards and other items were illegally purchased and caused a considerable number of losses. In this manner, specialized fraud schemes are becoming ever more sophisticated as the world continues to change.

There is thus a growing need to protect not only oneself, but also one's family and friends from these special frauds. In response, we have been focusing on the deployment of our spam filter service to provide an effective countermeasure in deterring crime. Specifically, to improve the fraud and spam filtering functions and increase the value provided to users, we acquired all the outstanding shares of 280blocker LLC through an absorption-type merger. The company provides "280blocker," an application designed to block ads. In addition, we formed alliances with NTT East and NTT West as a part of our policy of expanding our alliance partner network. Following the agreements, their distributers and dealers have started offering "TobilaPhone Biz." We are also focusing on deepening our existing relationships with alliance partners and working to increase the number of monthly active users Note through various measures. As a result, more than 14 million users now use our service.

At the same time, we have diversified marketing activities for our cloud-based IP phone service, "TobilaPhone Cloud," to increase sales and won the Encouragement Award in the ASP/SaaS category for support operations at the 15th ASPIC IOT/AI/Cloud Award 2021. Furthermore, through a capital and business alliance with ageet Corporation we expect to improve the service quality of "TobilaPhone Cloud" and strengthen the system for steadily developing new services.

As a result, net sales increased 15.4% year-on-year to 1,424,656 thousand yen in the fiscal year ended October 31, 2021. Operating profit increased 16.3% to 579,911 thousand yen, ordinary profit increased 22.7% to 577,980 thousand yen and profit was up 19.8% to 386,047 thousand yen.

Note: Monthly active users (MAU) are the number of users of our products and services who access our server at least once a month to update a blocked phone number list automatically or to activate our app or other services. If a person uses multiple devices and each device has a separate agreement, the person is counted as different users.

MAU is an important KPI for determining the contribution of our products and services to eliminating problems caused by fraud and spam activities. Our revenue is, however, not always directly affected by an increase or decrease in MAU because contracts with business clients such as telecommunications companies have different terms.

Business segment performance was as follows: Fraud and spam prevention services

There are three service categories in this segment. A filtering service that blocks fraudulent and other malicious calls on mobile phones is the core business. The other categories are a filtering service for landline phones and TobilaPhone Cloud, a filtering service for phones used by businesses. We continued to focus on building an even larger and more powerful foundation for the provision of filtering services.

As a result, sales were 1,346,431 thousand yen, up 17.9% from one year earlier, and segment profit increased 19.2% to 897,281 thousand yen.

Others

Other services include a website design and operation support service, development projects outsourced by other companies and other activities. We do not intend to increase the scale of operations in this segment. Sales in the current fiscal year decreased 15.7% from one year earlier to 78,225 thousand yen, and the segment profit was 47,016 thousand yen, down 9.1%.

2

Tobila Systems Inc. (4441) Financial Results for FY10/21

Total operating profit is the sum of the profit of the two segments minus corporate expenses, which are not allocated to the reportable segment. Corporate expenses mainly consist of selling, general and administrative expenses that are not attributable to the reportable segment. In the current fiscal year, corporate expenses increased 19.2% from one year earlier to 364,387 thousand yen mainly because of higher administrative expenses because of a larger number of administrative personnel and the larger scale of operations.

1. Financial Position Assets

Total assets increased 522,052 thousand yen from the end of the previous fiscal year to 2,170,016 thousand yen at the end of the current fiscal year. This was attributable mainly to a decrease of 72,626 thousand yen in cash and deposits, and increases of 30,847 thousand yen in accounts receivable-trade, 325,221 thousand yen in goodwill, 72,291 thousand yen in software and 141,371 thousand yen in investment securities.

Liabilities

Total liabilities increased 380,152 thousand yen from the end of the previous fiscal year to 681,007 thousand yen. The main factors include increases of 13,284 thousand yen in advances received, 18,522 thousand yen in income taxes payable, and 332,822 thousand yen in long-term borrowings (including current portion of long-term borrowings).

Net assets

Total net assets increased 141,899 thousand yen from the end of the previous fiscal year to 1,489,008 thousand yen. The main factors include a decrease of 112,161 thousand yen in retained earnings due to dividends paid, the purchase of treasury shares of 195,240 thousand yen, the booking of profit of 386,047 thousand yen, and disposal of treasury shares of 51,637 thousand yen.

The equity ratio decreased from 81.7% at the end of the previous fiscal year to 68.6%.

(3) Cash Flows

Cash and cash equivalents (hereinafter, "net cash") at the end of the current fiscal year decreased 72,626 thousand yen from the end of the previous fiscal year to 1,145,732 thousand yen. Cash flows by category are as described below.

Cash flows from operating activities

Net cash provided by operating activities amounted to 491,922 thousand yen compared with 358,831 thousand yen in the previous fiscal year. This was mainly due to profit before income taxes of 546,998 thousand yen, depreciation of 60,157 thousand yen and gain on sales of investment securities of 25,561 thousand yen, while there were income taxes paid of 162,911 thousand yen and an increase of 20,758 thousand yen in trade receivables.

Cash flows from investing activities

Net cash used in investing activities amounted to 652,300 thousand yen compared with 123,829 thousand yen in the previous fiscal year. The main factors include payments for the purchase of intangible assets of 93,714 thousand yen, purchase of shares of subsidiaries and associates of 376,209 thousand yen and purchase of investment securities of 166,933 thousand yen.

Cash flows from financing activities

Net cash provided by financing activities amounted to 45,801 thousand yen compared with 15,117 thousand yen used in the previous fiscal year. This was mainly due to proceeds from long-term borrowings of 350, 000 thousand yen, while there were payments for the purchase of treasury shares of 195,411 thousand yen and dividends of 111,991 thousand yen.

3