SPRIX : Consolidated Financial Results for the Three Months Ended December 31, 2021

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.

February 14, 2022

Consolidated Financial Results

for the Three Months Ended December 31, 2021

[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:	February 14, 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
	(All amounts are rounded down to the nearest million yen.)

1. Consolidated financial results for the three months ended December 31, 2021 (from October 1, 2021 to December 31, 2021)

(1) Consolidated operating results (cumulative)

(Percentage figures represent changes from the same period of the previous fiscal year.)

Three 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
December 31,	7,537	133.1	1,269	70.8	1,272	71.3	811	61.4
2021
December 31,	3,233	−	743	−	742	−	503	−
2020
(Reference) Comprehensive income		For the three months ended December 31, 2021: 807 million yen (62.4%)
			For the three months ended December 31, 2020: 497 million yen (−%)
Three months	Basic earnings	Diluted earnings
ended	per share		per share
		Yen		Yen
December 31,		47.38		45.88
2021
December 31,		29.21		28.33
2020

(Note) Quarterly consolidated financial statements are prepared from the second quarter ended March 31, 2020. Accordingly, year-on- year comparison in ratio for the three months ended December 31, 2020 is not available.

(2) Consolidated financial position

As of

Total assets

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

%

December 31, 2021

19,448

9,285

47.6

September 30, 2021

19,277

8,864

45.9

(Reference) Equity

As of December 31, 2021:

9,264 million yen

As of September 30, 2021: 8,846 million yen

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

−

September 30, 2022

Fiscal year ending

19.00

−

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 figures represent changes from the previous fiscal year.)

Fiscal year ending	Net sales		Operating profit		Ordinary profit		Profit attributable to	Earnings
			owners of parent		per share
	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) Changes from the latest announced consolidated forecasts: None

• Notes

1. Changes in significant subsidiaries during the three months ended December 31, 2021 (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 other than the above a.:	None
c. Changes in accounting estimates:	None
d. Restatements:	None
(4) Number of issued and outstanding shares (common shares)

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

As of December 31, 2021:	17,482,050 shares
As of September 30, 2021:	17,473,950 shares
b. Number of treasury shares
As of December 31, 2021:	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)
Three months ended December 31, 2021:	17,134,359 shares
Three months ended December 31, 2020:	17,221,972 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 SPRIX, Ltd. (the "Company") and assumptions determined to be reasonable. They are not intended as the Company's commitment to achieve such forecasts.
  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 December 31, 2020, 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

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1. QUALITATIVE INFORMATION ON QUARTERLY FINANCIAL RESULTS

Forecast-related matters described in this report are based on the understandings as of December 31, 2021.

1. Overview of Consolidated Operating Results

The economy in Japan during the three months ended December 31, 2021 (the "current period") gradually recovered from severe hardship due to the spread of COVID-19, seeing signs of improvement in certain areas. However, the situation still needs to be carefully monitored, including the impact of various political measures undertaken, the global economic landscape, and the progress of vaccinations.

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.

The Group has expanded its service lines amid such business environment by consolidating Shonan Seminar CO., LTD. (or "Shonan") as a wholly-owned subsidiary of the Company at the end of the previous quarter ended December 31, 2020. Thanks to the acquisition, the Group currently offers a variety of JUKU (*) brands as its JUKU services, formally referred to as "School Operation Services." On top of the Company-operating JUKU, namely "Mori JUKU" dedicated to offering individual tutoring cram schools, "Self-Study RED," and "Sora JUKU," the Group incorporates three other JUKU brands: "Mori JUKU" operated by Shonan; "Shonan Seminar" offering group teaching-style JUKU; and "Kawaijuku Manavis" specialized in teaching senior high school students to prepare for college entrance exams. Information by segment is as follows:

1. JUKU are private, fee-paying schools in Japan that offer supplementary classes after school to support children's school work or prepare for various entrance exams, including college entrance exams.

"Mori JUKU," the Group's core business specialized in offering individual tutoring cram schools, ran 175 schools as of December 31, 2021, up 18 schools year-on-year, comprising 130 schools run by the Company, up 15 schools year-on-year, and 45 schools run by Shonan, up 3 schools year-on-year. The number of enrolled students for "Mori JUKU," including those run by Shonan, totaled 42,279, up 2,441 year-on-year as of December 31, 2021. Of the 42,279 enrolled students, 32,999 students belonged to Mori JUKU run by the Company, an increase of 1,826 students from a year earlier, and 9,280 students to Mori JUKU run by Shonan, an increase of 615 students from a year earlier. The number of students saw an uptick, a continuous trend from summer sessions, where more students continued or started their enrollment and less students dropped out during the quarter. The accomplishment is largely due to the Group's continuous effort in providing high quality tutoring service and R&D activities, while placing the highest priority on the safety of students, their parents and employees of the Group during the difficult time of the pandemic.

"Shonan Seminar" offers group teaching-style classes mainly to elementary and junior high school students. As of December 31, 2021, 179 Shonan Seminar schools were run by Shonan, up two 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 December 31, 2021, 47 schools were run by Shonan under a franchise, no change in numbers from a year earlier.

"Self-Study RED" is included in "Other" section under the reportable segment disclosure. RED offers virtual cram schools utilizing online academic contents. As of December 31, 2021, there were five directly-operated schools with no change in numbers year-on-year, and 168 franchised schools, up 26 schools from a year earlier.

The Group has changed the classification of reportable segment from the current period. The following table shows segment information by major JUKU brands, including net sales and segment profit for the three months to December 31, 2021, as well as the number of schools and enrolled students as of December 31, 2021. For further detail, see "2. Change in reportable segment" per the [Segment Information] section in the attached Supplementary Information.

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