［Delayed］Summary of Consolidated Financial Results for the Six Months Ended September 30, 2021 (Based on Japanese GAAP)

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 September 30, 2021 (Based on Japanese GAAP)

November 5, 2021

Company name:

CRESCO LTD.

Stock exchange listing:

Tokyo

Stock code:

4674

URL

https://www.cresco.co.jp/

Representative:

President, Executive Officer

Hiroyuki Nemoto

Inquiries:

Director, Managing Executive Officer

Kazuo Sugiyama

TEL

[phone]

Scheduled date to file Quarterly Securities Report:

November 8, 2021

Scheduled date to commence dividend payments:

December 1, 2021

Preparation of supplementary material on quarterly financial results:

No

Holding of quarterly financial results meeting:

Yes

(for analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended September 30, 2021 (from April 1, 2021 to September 30, 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 September 30, 2021

21,061

9.7

2,017

47.6

2,223

20.5

1,606

22.8

Six months ended September 30, 2020

19,203

(0.1)

1,366

(20.8)

1,844

(2.7)

1,308

14.9

Earnings per share

Diluted earnings per share

Yen

Yen

Six months ended September 30, 2021

76.44

-

Six months ended September 30, 2020

62.34

-

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

%

As of September 30, 2021

30,948

20,602

66.6

As of March 31, 2021

30,342

19,485

64.2

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 March 31, 2021

-

18.00

-

20.00

38.00

Year ending March 31, 2022

-

20.00

Year ending March 31, 2022 (Forecast)

-

20.00

40.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022 (from April 1, 2021 to March 31, 2022)

Percentages indicate year-on-year changes

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings

owners of parent

per share

Millions of yen

%

Millions of yen

%

Millions of yen

% Millions of yen

%

Yen

Full year

42,400

6.8

3,850

10.5

4,200

2.4

2,850

8.2

135.54

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4. Notes
(1)	Changes in significant subsidiaries during the six months ended September 30, 2021:	No
(2)	Application of special accounting methods for preparing quarterly consolidated financial statements:	No
(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:	Yes
	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 September 30, 2021	23,000,000 shares	As of March 31, 2021			23,000,000 shares
	Number of treasury shares at the end of the period
		As of September 30, 2021	1,973,121 shares	As of March 31, 2021			1,978,723 shares
	Average number of shares during the period (cumulative from the beginning of the fiscal year)
		Six months ended September 30, 2021	21,021,600 shares	Six months ended September 30, 2020		20,992,836 shares

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Quarterly consolidated financial statements

Quarterly consolidated balance sheets

			(Thousands of yen)
		As of March 31, 2021	As of September 30, 2021
Assets
Current assets
Cash and deposits	11,039,932	10,353,620
Notes and accounts receivable - trade	7,855,304	-
Notes and accounts receivable - trade, and contract assets	-	7,901,051
Electronically recorded monetary claims - operating	15,608	20,919
Securities	459,292	193,060
Money held in trust	64,146	70,154
Merchandise and finished goods	37,315	36,824
Work in process	156,750	270,173
Supplies	1,655	36,742
Other	449,756	560,353
Total current assets	20,079,762	19,442,901
Non-current assets
Property, plant and equipment	468,066	503,518
Intangible assets
Goodwill	494,413	1,634,173
Software	556,142	505,667
Other	12,950	14,248
Total intangible assets	1,063,506	2,154,089
Investments and other assets
Investment securities	6,704,112	6,843,764
Other	2,134,237	2,111,829
Allowance for doubtful accounts	(107,209)	(107,209)
Total investments and other assets	8,731,141	8,848,385
Total non-current assets	10,262,714	11,505,992
Total assets	30,342,477	30,948,894

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			(Thousands of yen)
		As of March 31, 2021	As of September 30, 2021
Liabilities
Current liabilities
Accounts payable - trade	1,856,920	1,984,482
Short-term borrowings	100,000	130,000
Current portion of long-term borrowings	671,934	776,950
Income taxes payable	1,056,596	689,543
Provision for bonuses	1,457,806	1,487,634
Provision for loss on order received	7,861	12,224
Other	2,001,243	1,438,169
Total current liabilities	7,152,363	6,519,005
Non-current liabilities
Long-term borrowings	1,142,515	1,065,040
Long-term accounts payable - other	52,746	52,701
Retirement benefit liability	2,432,926	2,631,608
Asset retirement obligations	71,696	72,353
Other	4,366	6,172
Total non-current liabilities	3,704,250	3,827,876
Total liabilities	10,856,613	10,346,881
Net assets
Shareholders' equity
Share capital	2,514,875	2,514,875
Capital surplus	3,363,262	3,369,109
Retained earnings	14,388,180	15,574,575
Treasury shares	(2,207,691)	(2,199,723)
Total shareholders' equity	18,058,626	19,258,836
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	1,427,859	1,340,559
Foreign currency translation adjustment	2,547	4,686
Remeasurements of defined benefit plans	(3,169)	(2,070)
Total accumulated other comprehensive income	1,427,236	1,343,175
Total net assets	19,485,863	20,602,012
Total liabilities and net assets	30,342,477	30,948,894

4

Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income Quarterly consolidated statements of income

			(Thousands of yen)
		Six months ended	Six months ended
		September 30, 2020	September 30, 2021
Net sales	19,203,466	21,061,881
Cost of sales	15,948,432	16,990,540
Gross profit	3,255,033	4,071,341
Selling, general and administrative expenses
Advertising expenses	15,461	23,144
Remuneration, salaries and allowances for directors (and	807,863	894,028
other officers)
Provision for bonuses	117,226	164,740
Retirement benefit expenses	16,551	27,079
Legal welfare expenses	119,363	140,657
Recruiting expenses	78,910	69,751
Entertainment expenses	8,461	7,798
Rent expenses on land and buildings	80,631	79,664
Supplies expenses	30,197	49,419
Enterprise tax	93,976	100,408
Other	519,593	496,897
Total selling, general and administrative expenses	1,888,235	2,053,591
Operating profit	1,366,798	2,017,749
Non-operating income
Interest income	117,507	188,193
Dividend income	45,340	25,835
Gain on sale of securities	24,120	15,381
Gain on valuation of securities	11,824	-
Gain on investments in money held in trust	8,098	6,008
Gain on valuation of derivatives	276,093	5,506
Subsidy income	19,177	16,443
Share of profit of entities accounted for using equity method	5,768	-
Other	11,058	8,510
Total non-operating income	518,988	265,878
Non-operating expenses
Interest expenses	3,461	3,209
Foreign exchange losses	-	8,069
Investment advisory fees	27,971	46,093
Share of loss of entities accounted for using equity method	-	1,494
Other	9,580	1,283
Total non-operating expenses	41,013	60,150
Ordinary profit	1,844,773	2,223,478

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