Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2023 [J-GAAP]
October 28, 2022
Name of listed company:
Securities code:
Representative:
Contact:

ARTNATURE INC.
Listed on: Tokyo Stock Exchange
7823
URL: https://www.artnature.co.jp/english/index.html
Yoshikata Igarashi, Chairman and President
Hiroaki Inoue, General Manager, Finance & Accounting Division
TEL: +81-3-3379-3334
Senior Corporate Officer
Scheduled date of filing the quarterly financial report:
November 11, 2022
Scheduled date of the start of dividends distribution:
December 1, 2022
Supplementary quarterly materials prepared:
None
Explanation meeting for quarterly financial results:
Yes (for institutional investors and analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated results for the first six months ended September 30, 2022 (April 1, 2022 – September 30, 2022)(Percentage figures show changes from the previous year.)(1) Consolidated operating results
Net sales

Operating income

Millions of yen%
Millions of yen%
Millions of yen
Six months ended
September 30, 2022
21,28810.1
2,372
51.92,374
September 30, 2021
19,329
30.7
1,561
―
1,492
Note: Comprehensive income:Six months ended September 30, 2022: ¥1,474 million (51.1%)
Six months ended September 30, 2021: ¥975 million (―%)

Net income per share
Six months ended
September 30, 2022
September 30, 2021

Net income attributable toowners of the parentcompany

Ordinary income%Millions of yen%

59.2
―

1,463
857

70.7―

Diluted net income
per share

Yen

Yen

45.48
26.71

44.94
26.43

(2) Consolidated financial position
Total assets
Net assets
Millions of yenMillions of yen
As ofSeptember 30, 2022
46,86825,881March 31, 2022
46,51024,596(Reference) Equity capital: As of September 30, 2022: ¥25,617 million

Shareholders’ equity ratio

Net assets per share
Yen%

54.7
52.4
As of March 31, 2022: ¥24,367 million

789.71758.47

2. Dividends
First quarter-end

Second quarter-end

Dividends per share
Third quarter-end

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2022―
14.00
Year ending March 31, 2023―
14.00
Year ending March 31, 2023
(forecast)
Note: Revisions to dividend forecasts published most recently: None―

14.00

28.00

―

14.00

28.00

Year-end

Annual

3. Consolidated financial forecast for the fiscal year ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentage figures show changes from the previous year.)Net sales
Millions of yen

Operating income%

Millions of yen

Net income
attributable to ownersof the parent company

Ordinary income%

Millions of yen%

Millions of yen%

Net income
per share
Yen

Full year
42,814
5.9
3,126
3.5
3,106
2.2
1,698
41.0
52.77
Note: Revisions to most recently announced results forecasts: YesFor the revision to the results forecast, see the Notice Regarding the Revision of the Financial Forecast for the Fiscal Year Ending March
31, 2023 announced on October 28, 2022.

Notes:(1) Significant changes to subsidiaries during the period (Transfers of specific subsidiaries with changes in the scope of consolidation): None
(2) Application of specific accounting methods for preparing the quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates and restatement of revisions
1) Changes in accounting policies due to revision of accounting standards, etc.: Yes
2) Changes in accounting policies other than 1):
None3) Changes in accounting estimates:
None4) Restatement of revisions:
None
Note: More information is provided on page 9 of the supplementary materials, “2. Quarterly consolidated financial statements and related
notes, (4) Notes on quarterly consolidated financial statements (Changes in accounting policies).”(4) Number of outstanding shares (common stock):1) Number of shares issued and outstanding (including treasury shares)
As of September 30, 2022
34,393,200 shares
As of March 31, 2022
34,393,200 shares
2) Number of treasury shares
As of September 30, 2022
1,953,939 shares
As of March 31, 2022
2,266,339 shares
3) Average number of shares issued and outstanding in each period
Six months ended September 30, 2022 32,182,425 shares
Six months ended September 30, 2021 32,101,675 shares*This quarterly kessan tanshin document is outside the scope of audit procedures conducted by certified public
accountants or the independent auditor.

*Explanation of the appropriate use of financial results forecasts; other important items(Cautionary statement regarding forward-looking statements, etc.)
Forward-looking statements in this document, including forecasts, are based on information available at the time of disclosure and on
certain assumptions deemed reasonable by the Company. Actual results may differ materially from forward-looking statements due to anumber of factors. For more information about these assumptions and other conditions that form the basis of these forecasts, please see
page 3 of the supplementary materials, “1. Analysis of operating results and financial position, (3) Qualitative information on consolidated
financial forecasts.”

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
Contents
1. Analysis of operating results and financial position .............................................................................................................. 2(1) Analysis of operating results ................................................................................................................................................. 2(2) Analysis of financial position ............................................................................................................................................... 2(3) Qualitative information on consolidated financial forecasts ................................................................................................. 3
2. Quarterly consolidated financial statements and related notes ............................................................................................ 4(1) Quarterly consolidated balance sheets .................................................................................................................................. 4(2) Quarterly consolidated statements of income and comprehensive income .......................................................................... 6(Quarterly consolidated statements of income) .................................................................................................................... 6(Quarterly consolidated statements of comprehensive income) ........................................................................................... 7(3) Quarterly consolidated statements of cash flows .................................................................................................................. 8(4) Notes on quarterly consolidated financial statements .......................................................................................................... 9(Notes on the going concern assumption) ............................................................................................................................ 9(Notes on significant fluctuation in amounts of shareholders’ equity) ................................................................................. 9(Changes in accounting policies).......................................................................................................................................... 9–1–ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023

1. Analysis of operating results and financial position(1) Analysis of operating results
Operating results for the first six months of fiscal 2023
In the first six months of fiscal 2023 (April-September 2022), although there were signs of a recovery in consumer spending
due to the easing of restraints on a range of activities that had been enforced because of the spread of COVID-19, the situation
surrounding the Japanese economy remained uncertain because the surge in crude oil and raw material prices, which wasattributable to the prolonged war in Ukraine, and the sharp weakening of the yen affecting consumer spending.
Against this backdrop, ARTNATURE INC. and its consolidated subsidiaries (the ARTNATURE Group) saw the ARTNATURE
Challenge Plan, the three-year medium-term management plan, mark its final year. Under the plan, we have been implementing
six priority challenge initiatives, as we did in the previous year: (1) grow the Group’s earnings, (2) develop new business fields,(3) reinforce recruitment, (4) cultivate human resources, (5) encourage dialogue with capital markets, and (6) drive business
innovation, with the aim of strengthening the ARNATURE Group’s position in existing businesses and further expanding newbusinesses to build the foundations for a new ARTNATURE capable of opening up the next phase in the Group’s history. At
the same time, we have continued to take comprehensive measures to prevent COVID-19 infections in our business activities.
As a result, consolidated net sales in the first six months under review increased 10.1% year on year to ¥21,288 million. Interms of profits, operating income stood at ¥2,372 million (increasing 51.9% year on year), and ordinary income came to¥2,374 million (increasing 59.2% year on year) due to an increase in net sales. Net income attributable to owners of the parent
company was ¥1,463 million (increasing 70.7% year on year).
Business results by segment are as follows.
< Men’s business >Sales in the men’s business increased 4.3% year on year, to ¥11,556 million, as a result of the sale of new products and thepromotion of customer retention programs, among other initiatives.
< Ladies’ business >Sales in the ladies’ business climbed 18.8% year on year, to ¥6,749 million, mainly reflecting strong sales of new products andan increase in the number of exhibition and trial fitting events held as well as that of products sold.
< Ladies’ ready-made wigs business >Sales in the ladies’ ready-made wigs business rose 15.7% year on year, to ¥2,084 million, chiefly reflecting an increase in thenumber of products sold due to a rise in the number of customers visiting retail facilities in which the Company’s stores arelocated.
(2) Analysis of financial position
1) Assets, liabilities and net assets(Assets)
As of the end of the second quarter, total assets were ¥46,868 million, an increase of ¥357 million compared with the end of
the previous fiscal year. Current assets increased ¥188 million, mainly due to increases in cash and deposits and merchandiseand finished goods, and non-current assets increased ¥168 million, primarily reflecting an increase in property, plant andequipment.
(Liabilities)As of the end of the second quarter, liabilities totaled ¥20,986 million, a decrease of ¥927 million compared with the end of
the previous fiscal year. This was largely due to a decrease of ¥872 million in current liabilities chiefly due to decreases inaccounts payable - other and advances received.
(Net assets)
As of the end of the second quarter, net assets were ¥25,881 million, an increase of ¥1,284 million compared with the end of
the previous fiscal year. This largely reflected an increase in retained earnings.

–2–ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
2) Cash flow position
As of the end of the second quarter, cash and cash equivalents (cash) totaled ¥19,546 million, an increase of ¥94 million
compared with the end of the previous fiscal year. The cash flow position and contributing factors in each section of thestatements of cash flows are as follows.
(Cash flows from operating activities)
Operating activities provided net cash of ¥1,476 million, compared with ¥550 million in the same period a year earlier. Cashinflows, including income before income taxes of ¥2,362 million, depreciation of ¥386 million, and a decrease in notes andaccounts receivable-trade of ¥611 million, more than offset cash outflows, including income taxes paid of ¥805 million, an
increase in inventories of ¥509 million, and a decrease in advances received of ¥639 million.
(Cash flows from investing activities)
Investing activities used net cash of ¥999 million, compared with ¥649 million in the same period a year earlier. That mainlyreflected purchase of property, plant and equipment of ¥747 million and payments for long-term loans receivable of ¥100million.
(Cash flows from financing activities)
Financing activities used net cash of ¥459 million, compared with ¥464 million in the same period a year earlier. That mainlyreflected cash dividends paid of ¥449 million.
(3) Qualitative information on consolidated financial forecasts
The Company revised its consolidated financial forecasts for the fiscal year ending March 31, 2023 on October 28, 2022. For
details of the revision, see the Notice Regarding the Revision of the Financial Forecast for the Fiscal Year Ending March 31,2023 announced on October 28, 2022.

–3–ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(Millions of yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Accounts receivable – trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Others, net
Total property, plant and equipment
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–4–

As of September 30, 2022

19,546
3,066
23
3,050
182
1,195
964
(5)
28,021

19,649
2,466
26
3,444
187
1,354
1,086
(5)
28,210

4,779
3,915
8,694

4,789
4,159
8,949

233
441
674

186
425
612

9,512
(393)9,119
18,48846,510

9,580
(485)
9,095
18,65746,868ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023

(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Advances received
Provision for bonuses
Provision for directors’ bonuses
Provision for product warranties
OthersTotal current liabilities
Non-current liabilities
Net defined benefit liability
Asset retirement obligations
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets–5–

As of September 30, 2022

320
2,288
929
6,502
1,053
145
36
2,961
14,237

634
1,614
998
5,862
1,061
75
39
3,078
13,365

4,170
1,547
1,959
7,676
21,914

4,273
1,580
1,768
7,621
20,986

3,667
3,557
18,307(1,272)
24,2603,667
3,607
19,321(1,096)25,499

62
14
29
106
217
12
24,596
46,510

(19)
102
35
117
251
12
25,881
46,868ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Millions of yen)

Net sales
Cost of sales
Gross profitSelling, general and administrative expenses
Operating income
Non-operating income
Interest income
Gain on investments in investment partnerships
Foreign exchange gains
Subsidy income
OthersTotal non-operating income
Non-operating expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Guarantee commission
OthersTotal non-operating expenses
Ordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Total extraordinary losses
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Net income(loss) attributable to non-controlling interests
Net income attributable to owners of the parent company–6–

Six months ended
September 30, 2021
19,3296,310
13,01911,4571,561

Six months ended
September 30, 2022
21,288
6,792
14,496
12,123
2,372

23
10―
923
66

21―
69
1
17
109

2116
125
136
1,492

―
92
10
4
107
2,374

―
4
4
1,487
651
(17)
633
853
(3)
857

0
11
11
2,362
874
22
897
1,465
1
1,463

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
(Quarterly consolidated statements of comprehensive income)(Millions of yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of the parent company
Non-controlling interests–7–

Six months ended
September 30, 2021
853

Six months ended
September 30, 2022
1,465

29
77
14
121975

(82)
85
6
9
1,474

979
(3)

1,4740ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
(3) Quarterly consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in provision for product warranties
Increase (decrease) in provision for point card certificates
Increase (decrease) in net defined benefit liability
Interest income
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable – trade
Subsidy income
Increase (decrease) in advances received
OthersSubtotalInterest income received
Income taxes paid
Income taxes refund
Subsidies received
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Long-term loan advances
Collection of long-term loans receivablePayments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
OthersNet cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease obligations
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period–8–

Six months ended
September 30, 2021

Six months ended
September 30, 2022

1,487
425
486
115
23(55)
5(107)
114(23)―387(285)
(9)
(9)
(372)
(346)
1,438
26(924)
09
550

2,362
386
11
4691
8(70)
3―
111
(21)
0611(509)
307
(1)
(639)
(442)
2,256
23(805)―
1
1,476(388)
(34)
(150)
0(81)
27(22)
(649)

(747)
(77)
(100)
0(79)
57(51)
(999)

(15)
(449)
(464)
40(523)
18,984
18,461

(10)
(449)
(459)
76
94
19,452
19,546

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
(4) Notes on quarterly consolidated financial statements(Notes on the going concern assumption)
There is no related information.
(Notes on significant fluctuation in amounts of shareholders’ equity)
There is no related information.
(Changes in accounting policies)
The Company decided to start applying the Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021; hereinafter the “Fair Value Measurement Implementation Guidance”) at the beginningof the first quarter, while also implementing the new accounting policy stipulated in the Fair Value Measurement
Implementation Guidance according to the provisional treatment provided for in Paragraph 27-2 of the Fair Value Measurement
Implementation Guidance into the future. This application has no impact on quarterly consolidated financial statements.

–9–