Proto : Consolidated Financial Results for the Nine Months Ended June 30, 2020

Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results

for the Three Months Ended June 30, 2020

[Japanese GAAP]

July 31, 2020

Company name: PROTO CORPORATION
Stock exchange listing: Tokyo,Nagoya
Code number: 4298
URL: https://www.proto-g.co.jp/
Representative: Kenji Kamiya	President
Contact: Akito Ode	Executive officer

Phone: [phone]

Scheduled date of filing quarterly securities report: August 07, 2020

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes

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

1. Consolidated Financial Results for the Three Months Ended June 30, 2020 (April 01, 2020 to June 30, 2020)

(1) Consolidated Operating Results			(% indicates changes from the previous corresponding period.)
	Net sales		Operating profit	Ordinary profit		Profit attributable to
			owners of parent
Three months ended	Million yen		%	Million yen	%	Million yen		%	Million yen	%
June 30, 2020	13,518		(8.0)	1,502	3.7	1,554		8.2	1,017	(1.8)
June 30, 2019	14,698		(7.1)	1,448	14.6	1,436		1.1	1,035	13.2

(Note) Comprehensive income:	Three months ended June 30, 2020:
	Three months ended June 30, 2019:

¥	1,138 million	[	14.3%]
¥	996 million	[	8.6%]

	Basic earnings		Diluted earnings per
	per share		share
Three months ended		Yen	Yen
June 30, 2020		25.34	-
June 30, 2019		25.82	-

(Note) PROTO CORPORATION carried out a 2-for-1 split of common shares on July 1, 2019.

Net income per share was calculated under the assumption that said share split had been conducted at the beginning of the previous consolidated accounting year.

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio
As of	Million yen		Million yen	%
June 30, 2020	44,535		32,520	73.0
March 31, 2020	44,726		31,932	71.3
(Reference) Equity: As of	June 30, 2020:	¥	32,493 million
As of	March 31, 2020:	¥	31,903 million

2. Dividends

					Annual dividends
		1st	2nd	3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
		Yen		Yen	Yen		Yen	Yen
Fiscal year ended March 31, 2020		-		13.75	-		13.75	27.50
Fiscal year ending March 31, 2021		-
Fiscal year ending March 31, 2021				12.50	-		12.50	25.00
(Forecast)
(Note) Revision to the forecast for dividends	announced most	recently:	No
(Note) PROTO CORPORATION carried out a 2-for-1 split of common shares on July 1, 2019.
For the year ended Mar. 2020, PROTO CORPORATION took the stock split into consideration.
(Note) Breakdown of the annual dividend for the fiscal year ended March 31, 2020 :
Commemorative dividend	25.00	yen
Special dividend	2.50	yen

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021(April 01, 2020 to March 31, 2021)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable	Basic earnings
		to owners of parent	per share
Six months ended	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
28,090		(5.9)	2,234	(17.9)	2,292	(17.5)	1,443	(54.6)	35.93
September 30, 2020
Full year	60,000		1.5	5,225	1.7	5,289	(1.2)	3,481	(30.3)	86.68
(Note) Revision to the financial results forecast announced most recently:	Yes
(Note) For details, please refer to the "Notification Regarding Earnings Forecast" dated July 31, 2020.

• Notes:

1. Changes in significant subsidiaries during the three months ended June 30, 2020

(changes in specified subsidiaries resulting in changes in scope of consolidation):	No
New	-	(Company name:		)
Exclusion:	-	(Company name:		)
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:	No

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

June 30, 2020:	41,925,300	shares
March 31, 2020:	41,925,300	shares
2) Total number of treasury shares at the end of the period:
June 30, 2020:	1,766,217	shares
March 31, 2020:	1,763,392	shares

3) Average number of shares during the period:
Three months ended June 30, 2020:	40,159,789	shares
Three months ended June 30, 2019:	40,116,921	shares
*PROTO CORPORATION carried out a 2-for-1 split of common shares on July 1, 2019.
Therefore, "Total number of issued shares	(common shares)" were calculated under the assumption that said share split had been
conducted at the beginning of the previous consolidated accounting year.

• This quarterly report is not subject to quarterly review procedures by certified public accountants or an auditing firm.
• Explanation for appropriate use of forecasts and other notes
  The forward-looking statements such as operational forecasts contained in this statements summary are based on the information currently available to the Company and certain assumptions which are regarded as legitimate. Actual results may differ significantly from these forecasts due to various factors.

Quarterly Consolidated Financial Statements

Quarterly Consolidated Balance Sheets

				(Million yen)
			As of March 31,2020	As of June 30,2020
Assets
	Current assets
		Cash and deposits	18,057	17,519
		Notes and accounts receivable - trade	4,913	4,249
		Inventories	4,048	4,610
		Other	1,219	1,789
		Allowance for doubtful accounts	(6)	(5)
		Total current assets	28,231	28,163
	Non-current assets
		Property, plant and equipment
		Buildings and structures, net	6,059	5,980
		Land	4,570	4,570
		Other, net	690	666
		Total property, plant and equipment	11,320	11,217
		Intangible assets
		Goodwill	1,546	1,438
		Other	1,002	994
		Total intangible assets	2,548	2,432
		Investments and other assets
		Investments and other assets, gross	2,631	2,738
		Allowance for doubtful accounts	(6)	(16)
		Total investments and other assets	2,625	2,722
		Total non-current assets	16,494	16,372
	Total assets	44,726	44,535

				(Million yen)
			As of March 31,2020	As of June 30,2020
Liabilities
	Current liabilities
		Notes and accounts payable - trade	1,720	1,974
		Short-term borrowings	2,400	2,400
		Current portion of long-term borrowings	388	363
		Accrued expenses	2,303	2,244
		Income taxes payable	1,328	593
		Provision for sales returns	10	0
		Provision for bonuses	151	200
		Provision for merchandise warranties	35	31
		Provision for point card certificates	29	30
		Other	2,901	2,819
		Total current liabilities	11,268	10,658
	Non-current liabilities
		Long-term borrowings	681	597
		Provision for retirement benefits for directors (and	281	213
		other officers)
		Retirement benefit liability	4	5
		Asset retirement obligations	294	295
		Other	262	244
		Total non-current liabilities	1,524	1,356
	Total liabilities	12,793	12,015
Net assets
	Shareholders' equity
		Share capital	1,849	1,849
		Capital surplus	2,036	2,036
		Retained earnings	28,647	29,113
		Treasury shares	(1,306)	(1,306)
		Total shareholders' equity	31,227	31,692
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	199	324
		securities
		Foreign currency translation adjustment	477	476
		Total accumulated other comprehensive income	676	800
	Non-controlling interests	28	27
	Total net assets	31,932	32,520
Total liabilities and net assets	44,726	44,535

Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the three months)
		(Million yen)
	For the three months	For the three months
	ended June 30,2019	ended June 30,2020
Net sales	14,698	13,518
Cost of sales	8,763	7,566
Gross profit	5,934	5,952
Reversal of provision for sales returns	32	10
Provision for sales returns	15	0
Gross profit - net	5,951	5,962
Selling, general and administrative expenses	4,502	4,459
Operating profit	1,448	1,502
Non-operating income
Interest and dividend income	5	4
Foreign exchange gains	51	41
Other	10	26
Total non-operating income	67	71
Non-operating expenses
Interest expenses	5	3
Loss on investments in investment partnerships	-	8
Loss on valuation of derivatives	72	3
Other	1	5
Total non-operating expenses	79	20
Ordinary profit	1,436	1,554
Extraordinary income
Gain on sales of non-current assets	0	-
Total extraordinary income	0	-
Extraordinary losses
Loss on sales and retirement of non-current assets	0	0
Total extraordinary losses	0	0
Profit before income taxes	1,436	1,554
Income taxes - current	450	539
Income taxes - deferred	(42)	0
Total income taxes	407	540
Profit	1,028	1,014
Loss attributable to non-controlling interests	(6)	(3)
Profit attributable to owners of parent	1,035	1,017

Quarterly Consolidated Statements of Comprehensive Income (For the three months)

			(Million yen)
		For the three months	For the three months
		ended June 30,2019	ended June 30,2020
Profit	1,028	1,014
Other comprehensive income
	Valuation difference on available-for-sale securities	(34)	124
	Foreign currency translation adjustment	1	(0)
	Total other comprehensive income	(32)	124
Comprehensive income	996	1,138
Comprehensive income attributable to
	Comprehensive income attributable to owners of	1,003	1,139
	parent
	Comprehensive income attributable to non-controlling	(6)	(1)
	interests