Net Marketing : Summary of Non-Consolidated Financial Results for the Fiscal Year Ended June 30, 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 Non-Consolidated Financial Results for the Fiscal Year Ended June 30, 2021

(Based on Japanese Accounting Standards)

	August 12, 2021
Company Name:	Net Marketing Co. Ltd.
Stock Exchange Listing:	Tokyo Stock Exchange
Code Number:	6175
URL:	https://www.net-marketing.co.jp/
Representative:	Kunihisa Miyamoto, Representative Director and CEO
Contact:	Koji Mimura, Director and CFO
(TEL)	[phone]

Scheduled date of ordinary general meeting of shareholders:	September 27, 2021
Scheduled date of the start of dividend payments:	September 28, 2021
Scheduled date to submit annual securities report:	September 27, 2021
Supplementary material for financial results:	Yes
Briefing on financial results:	Yes (for institutional investors, securities analysts and news media)

(Amounts of less than one million yen are rounded down.)

1. Financial Results for the Fiscal Year Ended June 30, 2021 (from July 1, 2020 to June 30, 2021)

(1) Financial Results						(Percentages calculated on year-on-year basis.)
	Net sales		Operating income	Ordinary income		Net income
	Million yen		%	Million yen	%	Million yen	%		Million yen		%
Year ended June 30, 2021	14,011		(2.5)	584	(20.5)		592	(20.7)		336		(34.0)
Year ended June 30, 2020	14,363		2.2	735	73.3		747	77.4		509		79.6
	Net income	Diluted net income	Return on equity	Return on assets	Operating income
	per share		per share	margin
		Yen		Yen		%		%			%
Year ended June 30, 2021	22.70		22.40		11.7		11.5			4.2
Year ended June 30, 2020	34.53		33.92		20.2		14.6			5.1

(Reference) Equity method gain or loss:

Year ended June 30, 2021	- million yen
Year ended June 30, 2020	- million yen

(2) Financial Position

		Total assets	Net assets	Ratio of shareholders'	Net assets per share
		equity to total assets
		Million yen	Million yen	%	Yen
As of June 30, 2021		5,321	3,012	56.6	201.75
As of June 30, 2020		4,977	2,753	55.3	186.04
(Reference) Shareholders' equity:		As of June 30, 2021	3,012 million yen
			As of June 30, 2020	2,752 million yen
(3) State of Cash Flows
		Cash flows from	Cash flows from	Cash flows from	Cash and cash
		equivalents at end of
		operating activities	investing activities	financing activities
		period
		Million yen	Million yen	Million yen	Million yen
Year ended June 30, 2021		426	(118)	(156)	3,365
Year ended June 30, 2020		367	(70)	(126)	3,214

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2. Dividends

		Dividends per share			Total dividends	Dividend	Dividend on
	End of 1st	End of 2nd	End of 3rd
		Year end	Annual	paid	payout ratio	equity
	quarter	quarter	quarter
	Yen	Yen	Yen		Yen	Yen	Million yen	%	%
Year ended June 30, 2020	-	0.00	-		6.00	6.00	88	17.4	3.2
Year ended June 30, 2021	-	0.00	-		6.00	6.00	89	26.4	3.0
Year ending June 30, 2022	-	0.00	-		6.00	6.00		23.9
(forecast)

3. Financial Results Forecasts for the Fiscal Year Ending June 30, 2022 (from July 1, 2021 to June 30, 2022)

(Percentages show year-on-year changes.)

	Net sales		Operating income	Ordinary income		Net income		Net income
				per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Year ending June 30, 2022	5,785	-	500	-	500	-	375	-	25.11

(Note) Because the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29), etc. is applied from the beginning of the fiscal year ending June 30, 2022, the financial results forecasts above are figures after applying this Accounting Standard, etc. Therefore, year-on-year changes are not stated.

* NOTE

1. Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements
2. 1. Changes in accounting principles accompanying the amendment of accounting standards: None
   2. Changes other than those in (i) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
3. Number of Shares Issued (Common shares)
4. 1. Number of shares issued at the end of the period (including treasury stock)

	As of June 30, 2021:	14,934,800 shares	As of June 30, 2020:	14,796,800 shares
(ii)	Number of treasury stock at the end of the period
	As of June 30, 2021:	188 shares	As of June 30, 2020:	188 shares
(iii)	Average number of shares issued during the period
	Year ended June 30, 2021:	14,831,528 shares	Year ended June 30, 2020:	14,765,703 shares

• The summaries of financial results are positioned outside the scope of the audit performed by a certified public accountant or an audit corporation.
• Explanations Regarding the Appropriate Use of Financial Results Forecasts and Other Items Worthy of Special Mention
  Forward-Looking Statements>
  Forward-looking statements in this summary, such as financial results forecasts, are based on information available to the Company at present and certain assumptions the Company judges to be rational. Those descriptions do not mean that the Company promises their achievement. Actual financial results and the like may also differ significantly from those descriptions depending on various factors.
  
  The Company will hold a results briefing (online) for institutional investors, securities analysts and news media on Monday, August 30, 2021. The Company will publish supplementary materials for explaining the financial results through the Company Announcements Disclosure Service of the Tokyo Stock Exchange and on its official website on Thursday, August 12, 2021.

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Financial Statements

(1) Balance Sheets

			(Unit: Thousand yen)
		Previous fiscal year	Fiscal year under review
		(As of June 30, 2020)	(As of June 30, 2021)
	Assets
	Current assets
	Cash and deposits	3,214,015	3,365,770
	Accounts receivable - trade	1,198,906	1,297,360
	Supplies	200	159
	Advance payments - trade	4,397	8,259
	Prepaid expenses	95,242	136,545
	Other	2,179	993
	Allowance for doubtful accounts	(9)	(10)
	Total current assets	4,514,932	4,809,080
	Non-current assets
	Property, plant and equipment
	Buildings	93,704	93,952
	Tools, furniture and fixtures	78,230	88,119
	Accumulated depreciation	(65,327)	(82,618)
	Total property, plant and equipment	106,608	99,453
	Intangible assets
	Goodwill	28,908	18,396
	Software	449	11,434
	Other	15,950	83,977
	Total intangible assets	45,308	113,808
	Investments and other assets
	Long-term prepaid expenses	55	31
	Deferred tax assets	58,352	34,407
	Leasehold and guarantee deposits	252,275	265,109
	Total investments and other assets	310,683	299,548
	Total non-current assets	462,599	512,810
	Total assets	4,977,532	5,321,891

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			(Unit: Thousand yen)
		Previous fiscal year	Fiscal year under review
		(As of June 30, 2020)	(As of June 30, 2021)
	Liabilities
	Current liabilities
	Accounts payable - trade	1,262,867	1,560,138
	Current portion of long-term loans payable	80,032	-
	Accounts payable - other	391,791	331,765
	Accrued expenses	2,597	2,412
	Income taxes payable	215,817	32,759
	Advances received	207,665	292,226
	Deposits received	5,630	46,394
	Other	58,104	43,207
	Total current liabilities	2,224,505	2,308,904
	Total liabilities	2,224,505	2,308,904
	Net assets
	Shareholders' equity
	Capital stock	408,329	414,539
	Capital surplus
	Legal capital surplus	398,329	404,539
	Total capital surplus	398,329	404,539
	Retained earnings
	Other retained earnings
	Retained earnings brought forward	1,946,203	2,194,043
	Total retained earnings	1,946,203	2,194,043
	Treasury shares	(135)	(135)
	Total shareholders' equity	2,752,726	3,012,986
	Share acquisition rights	300	-
	Total net assets	2,753,026	3,012,986
	Total liabilities and net assets	4,977,532	5,321,891

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(2) Statement of Income

			(Unit: Thousand yen)
		Previous fiscal year	Fiscal year under review
		(From July 1, 2019	(From July 1, 2020
		to June 30, 2020)	to June 30, 2021)
	Net sales	14,363,944	14,011,332
	Cost of sales	9,793,585	9,489,351
	Gross profit	4,570,358	4,521,981
	Selling, general and administrative expenses	3,835,138	3,937,729
	Operating income	735,219	584,251
	Non-operating income
	Interest income	29	32
	Commission fee	9,958	-
	Rewards income	1,862	1,731
	Subsidy income	-	6,630
	Other	745	338
	Total non-operating income	12,595	8,731
	Non-operating expenses
	Interest expenses	595	213
	Foreign exchange losses	-	112
	Other	33	3
	Total non-operating expenses	628	329
	Ordinary income	747,186	592,653
	Extraordinary income
	Gain on reversal of share acquisition rights	-	300
	Total extraordinary income	-	300
	Extraordinary losses
	Information security expenses	-	96,011
	Total extraordinary losses	-	96,011
	Net income before income taxes	747,186	496,942
	Income taxes - current	254,522	136,378
	Income taxes - deferred	(17,167)	23,944
	Total income taxes	237,355	160,322
	Net income	509,831	336,619

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