Summary of Business Results for the Second Quarter Ended September 30, 2020
[Japan GAAP] (Consolidated)
November 12, 2020
Company
JP-HOLDINGS, INC.
Listed on the TSE 1
Stock Code2749
URL: https://www.jp-holdings.co.jp
Representative
Tohru Sakai, President and Representative Director
Contact
Ryoji Tsutsumi, Director
T E L: +81-52-933-5419
Expected date of filing of quarterly securities report: November 12, 2020
Expected starting date of dividend payment: Preparation of quarterly supplementary financial document: Yes
Quarterly results briefing: Yes (for media members, institutional investors, analysts)（Rounded down to million yen）

１. Consolidated business results for the six months ended September 2020
(April 1, 2020 through September 30, 2020)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen
15,9552.8
632
Six months ended Sept. 2020
15,5178.7
496
Six months ended Sept. 2019
(Note) Comprehensive income
Six months ended September 2020: 627 million yen (19.2%)
Six months ended September 2019: 526 million yen (206.9%)
Net income
per share
Yen
6.30
5.88

Six months ended Sept. 2020
Six months ended Sept. 2019

Ordinary income

%
27.5
194.9

Million yen
955
744

%
28.4
86.4

Net income attributable toowners of parent

Million yen
551
516

%
6.8
118.9

Diluted net income per
share
Yen
-

(2) Consolidated financial position
Total assets

Net assets

Million yen
27,382As of Sept. 30, 2020
26,122As of Mar. 31, 2020
(Reference) Shareholders’ equity:
As of September 30, 2020: 9,922 million yen
As of March 31, 2020: 9,636 million yen

Million yen
9,922
9,636

Shareholders’ equity
ratio
%
36.2
36.9

2. Dividends
End of 1Q

Annual dividend
End of 3Q
Yen
Yen
0.00
0.00
-

End of 2Q
Yen-

Year ended Mar. 31, 2020
Year ending Mar. 31, 2021
Year ending Mar. 31, 2021 (forecast)(Notes) Revisions to dividend forecast for the current quarter: None

Year-end

Total

Yen
3.90

Yen
3.90

3.90

3.90

3. Forecast of consolidated business results for the fiscal year ending March 2021
(April 1, 2020 through March 31, 2021)(% change from the previous corresponding period)
Net sales

Net income attributableto owners of parent

Net income
per share

Operating income

Ordinary income

Million yen%

Million yen%

Million yen%

Yen

Year ending Mar. 31, 2021
33,0054.1
1,577(Notes) Revisions to business forecast for the current quarter: None

2.5

2,153

7.5

1,163

3.6

13.30

Million yen%―1―*Notes(1) Changes in significant subsidiaries during the period: None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements:
None(3) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement: None: None: None: None(4) Shares outstanding (common stock)①Number of shares outstanding at the end of period (treasury stock included)
As of September 30, 2020
87,849,400 shares
As of March 31, 2020
87,849,400 shares②Treasury stock at the end of period
As of September 30, 2020
380,707 shares
As of March 31, 2020
380,707 shares③Average number of stock during period (quarterly cumulative period)
Six months ended September 2020
87,468,693 shares
Six months ended September 201987,805,393 shares(Note) The number of treasury stock deducted for the calculation of the average number of stock during the fiscal year ended March
2020 includes the Company's shares held by Trust & Custody Services Bank, Ltd. as trust property of "Stock Benefit Trust(Employee Stock Ownership Plan)".
*Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing
firms.
*Explanation regarding appropriate use of business forecasts and other special instructions∙ Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the Company deems to be reasonable at the time this report was prepared. Actual results may differ significantly
from the forecasts due to various factors. For information regarding the assumptions that form the basis for the business results
forecasts and notes about using business forecasts, please refer to “1. Qualitative Information on Quarterly Financial Results (3)Consolidated Earnings Forecasts” (Page 3).
∙ The Company plans to hold an online meeting as the financial results briefing for media members, institutional investors andanalysts on Monday, November 16, 2020. The briefing for individual investors on financial results has been cancelled in order toprevent the spread of the COVID-19 infections.

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〇

Table of Contents of the Appendix

1. Qualitative Information on Quarterly Financial Results…………………………………………………..2(1) Results of Operations…………………………………………………………………………………..2(2) Financial Position………………………………………………………………………………………3(3) Consolidated Earnings Forecasts……………………………………………………………………….3
2. Quarterly Consolidated Financial Statements………………………………………………………………4(1) Quarterly Consolidated Balance Sheets…………………………………………………………………4(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income…………….6(3) Notes on Quarterly Consolidated Financial Statements…………………………………………………8(Notes on going concern assumption)………………………………………………………………….8(Notes if there is a significant change in the amount of shareholders' equity)…………………………8―3―

1. Qualitative Information on Quarterly Financial Results(1) Results of Operations
In the second quarter of the current fiscal year, the outlook for the Japanese economy remains uncertain, although domestic
economic activity has gradually resumed since the end of May, following the lifting of the State of Emergency declaration issued by
the government on April 7, 2020 to prevent the spread of a new coronavirus (COVID-19) infection. In the global economy, theoutlook also remains uncertain as the recovery of social and economic activities has been slow, despite the fact that lockdown ofmajor cities to prevent the infection has been gradually lifted.
In regard to the child-raising service business, the number of dual-income households is increasing as more women are entering theworkforce due to changes in women's awareness of social participation and the promotion of women's active participation in theworkforce by the government. Demand for childcare continues to be high due to free child education and childcare introduced from
October last year. However, as a result of the measures taken, including requests to refrain from going out and to regulate sales
activities until the end of May, when the State of Emergency was lifted, some facilities (nursery schools, school clubs, and children's
houses) in the areas where we operate child-raising facilities were temporarily closed at the request of the local governments.
Afterwards, the Company has been operating facilities under severe conditions while ensuring safety.
Under these severe situations, the Company established a COVID-19 Control Headquarters as measures against COVID-19
infections. While coordinating with local governments, the Company gives top priority to ensuring the safety of children as well as
the safety of parents, business partners and employees. Each facility establishes its own strict safety standards. These include bodytemperature measurement every morning, hand washing, gargling and alcohol disinfection, as well as wearing masks. The head
office and Tokyo Headquarters have introduced flexible work hours and telework systems to ensure quick response.
In addition, following the resolution at the 28th Ordinary General Meeting of Shareholders held on June 25, 2020, the Company has
made a new management system with a majority of outside directors who are experts with deep knowledge and knowledge foreducation, finance, legal affairs and governance. The Group long considered the strengthening of corporate governance to be an
important initiative to ensure transparency, fairness, and prompt and decisive decision-making. To further strengthen the structure,
the Company has shifted from a Company with Auditors to a Company with an Audit and Supervisory Committee. By further
strengthening the audit and supervisory functions of the Board of Directors and realizing speedy decision-making, the Company
aims to further strengthen corporate governance and increase corporate value through sustainable growth.
In the new management system, "selection and concentration" and "organizational revitalization" are set as management reform
policies, and as a concrete initiative, profitability is achieved by optimizing enrollment levels and staff assignment at existing
facilities. In addition to improving operational efficiency, we have reduced operational and indirect costs by introducing systems andreviewing operations, and have led to a reduction in the turnover rate by improving a comfortable working environment.
As for the new facility openings, the Group has opened a total of 9 facilities during the second quarter of the current fiscal year
according to the plan, including 4 nursery schools (4 in Tokyo) and 5 school clubs (5 in Tokyo).
(Nursery school)
Asc Senju Nursery School(Apr. 1, 2020)

Asc Toneri Ekimae Nursery School(Apr. 1, 2020)

Asc Oizumi Gakuen Nursery School(Apr. 1, 2020)

Asc Nerima 3-chome Nursery School(Apr. 1, 2020)(School clubs)
Wakuwaku Yanagida Hiroba/Yanagida Midori Club No. 2(Apr. 1, 2020)

Wakuwaku Yon-iwa Hiroba/Yon-iwa Elementary School Icho Club No. 2(Apr. 1, 2020)

Chofu City Jindaiji Children’s House School Club

(Apr. 1, 2020)

Mitaka City Minamiura School Club A(Apr. 1, 2020)

Mitaka City Yon-sho School Club B(Apr. 1, 2020)*1: As of April 1, 2020, with the opening of Wakuwaku Yanagida Hiroba/Yanagida Midori Club No.2, Wakuwaku Yanagida Hiroba was renamed
as Wakuwaku Yanagida Hiroba/Yanagida Midori Club No.1. With the opening of Wakuwaku Yon-iwa Hiroba/Yon-iwa Elementary School Icho
Club No.2, Wakuwaku Yon-iwa Hiroba was renamed as Wakuwaku Yon-iwa Hiroba/Yon-iwa Elementary School Icho Club No.1. With the
opening of Mitaka City Yon-sho School Club B, Mitaka City Minamiura School Club was renamed as Mitaka City Minamiura School Club A.
*2: Separate from the above, the following changes have been made as of April 1, 2020: Asc Higashiojima Nursery School, which had beenrunning since April 1, 2008 as an existing Tokyo Licensed Nursery School, was changed into a licensed nursery school; Obu City
Kyowahigashi Nursery School, which had been running since April 1, 2010, as public nursery school under private management, was changed
into a private facility under private management and is now run as Asc Kyowahigashi Nursery School.
*3: The three private school clubs operated by Amenity Life, Inc. (Elfikids Tsurugamine, Elfikids Futamatagawa, and Elfikids Ryokuentoshi)
were closed at the end of March 2020.

As a result, the Group came to have 213 nursery schools, 77 school clubs, 11 children's houses, 1 private school club, and 1
kindergarten (overseas facility), making a total of 303 facilities for supporting child-raising at the end of September 2020.

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As a result, the Group’s consolidated net sales were 15,955 million yen (up 2.8% year on year), operating income was 632 million
yen (up 27.5% year on year), ordinary income was 955 million yen (up 28.4% year on year), and net income attributable to ownersof parent was 551 million yen (up 6.8% year on year).
The major factors are as follows:
Net sales increased year on year due to the opening of new facilities, the transition from Tokyo licensed nursery school to licensed
nursery school, and an increase in the number of children admitted to existing facilities, despite a decrease in school lunch fees andrevenues from merchandise sales associated with the sale of photographs collected directly from parents, due to the temporalclosure of some facilities following the State of Emergency to prevent the spread of COVID-19 during the period from its
declaration on April 7, 2020 to its lifting at the end of May.
Operating income increased year on year owing to an increase in gross profit and a reduction in selling, general and administrative
expenses as a result of efforts to reduce foodstuff costs and other expenses related to school lunches due to the temporal closure ofsome facilities at the request of local governments, in addition to the above-mentioned factors that contributed to the increase in
net sales, despite a decrease in sales associated with the prevention of the spread of COVID-19.
In addition, ordinary income increased year on year thanks to an increase in operating income and increased subsidies associatedwith an increase in users of the corporate dormitory.
Net income attributable to owners of parent increased year on year, although we recorded an extraordinary loss of 115 million yen
due to the closure of 5 Tokyo licensed nursery schools (4 at the end of the current fiscal year and 1 at the end of the next fiscal
year) and 1 company-led nursery school (1 at the end of the current fiscal year) due to deteriorating earnings caused by changes inthe environment, including the situation of children on the waiting list in the region.

(2) Financial Position
As for the financial position at the end of the second quarter of the current fiscal year, the total assets amounted to 27,382 million
yen (up 1,259 million yen from the end of the previous fiscal year).
Current assets totaled 11,859 million yen (up 2,071 million yen), mainly reflecting an increase of 2,302 million yen in cash anddeposits, while there were decreases of 147 million yen in others, and 81 million yen in inventories.
Fixed assets totaled 15,522 million yen (down 812 million yen). This was mainly due to an increase of 108 million yen in
investment securities, while there were decreases of 490 million yen in construction in progress, 245 million yen in buildings andstructures, 68 million yen in investments and other assets, 67 million yen in long-term loans receivable.
Total liabilities amounted to 17,459 million yen (up 973 million yen from the end of the previous fiscal year).
Current liabilities totaled 5,958 million yen (up 37 million yen), mainly due to increases of 247 million yen in the current portionof long-term loans payable, 131 million yen in others, and 64 million yen in provision for bonuses, while there were decreases of
334 million yen in accounts payable-other, 84 million yen in income taxes payable, and 14 million yen in accrued consumption
taxes.
Fixed liabilities totaled 11,500 million yen (up 935 million yen), mainly due to increases of 849 million yen in long-term debt and
53 million yen in obligations for retirement plan.
Total net assets at the end of the second quarter were 9,922 million yen (up 286 million yen), mainly due to a 210 million yen
increase in retained earnings and a 64 million yen increase in valuation difference on securities.

(3) Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts have not been revised from the announcement on May 13, 2020, but actual results
may be different from the forecasts according to the changes in business situations, etc. If there are any changes, the Company will
disclose them properly.
Since the timing of the containment of COVID-19 remains uncertain, there is a possibility that it will have a major impact on
consolidated results depending on the spread and containment of the infection and other factors in the future.

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2. [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Thousand yen)Previous Fiscal Year
(March 31, 2020)

Current Second Quarter(September 30, 2020)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

6,206,487
76,2888,508,548
70,033Inventories
Accounts receivable - other111,259
2,410,895

29,2932,416,263

Other
Allowance for doubtful accounts

1,009,077-25,759

861,348-25,835

Total current assets

9,788,250

11,859,652

12,237,506

12,354,762

Accumulated depreciation and impairment-5,349,352-5,712,127

Buildings and structures, net

6,888,153

6,642,634

Machinery, equipment and vehicles

5,637

203

Accumulated depreciation-4,146-77

Fixed assets
Tangible fixed assets
Buildings and structures

Machinery, equipment and vehicles, net

1,490

126

923,279

956,578

Accumulated depreciation and impairment-671,412-716,699

Tools, furniture and fixtures, net

Tools, furniture and fixtures

251,866

239,878

Land
Construction in progress

980,894
497,896

980,894
7,596

Total tangible fixed assets

8,620,302

7,871,130

197,508

182,315

Intangible assets
Goodwill
Other

50,16946,824

Total intangible assets

247,678

229,140Investment securities
Long-term loans receivable

436,234
3,284,007

545,231
3,216,021

Guarantee deposits
Deferred tax assets

1,906,120
1,128,962

1,894,675
1,122,885

Other
Allowance for doubtful accounts

720,593-9,445

651,604-8,294

Total investments and other assets

7,466,474

7,422,123

16,334,455

15,522,395

26,122,705

27,382,047

Investments and other assets

Total fixed assets
Total assets―6―

(Thousand yen)Previous Fiscal Year
(March 31, 2020)

Current Second Quarter(September 30, 2020)

Liabilities
Current liabilities
Notes and accounts payable-trade
Current portion of long-term loans payable

195,720
1,639,460

176,540
1,887,052

Accounts payable – other
Income taxes payable

1,535,400
415,324

1,200,721
331,075

Accrued consumption taxes
Reserve for bonuses

117,626
554,836

102,659
618,854

Asset retirement obligation
Other

10,894
1,451,683

58,6801,583,112

Total current liabilities

5,920,945

5,958,697

9,479,911
757,052

10,329,541
810,638

320,567
7,979

348,911
11,798Fixed liabilities
Long-term debt
Obligations for retirement plan
Asset retirement obligation
Other
Total fixed liabilities

10,565,510

11,500,889

16,486,455

17,459,586

Shareholders’ equity
Capital1,603,955

1,603,955

Capital surplus
Retained earnings

1,449,544
6,982,526

1,449,544
7,192,698

Total liabilities
Net assets

Treasury stock-107,515-107,515

Total shareholders’ equity

9,928,510

10,138,682

Accumulated other comprehensive income
Valuation difference on available-for- salesecurities
Deferred gains or losses on hedges-224,438-160,291-5,537-8,188Foreign currency translation adjustments
Remeasurements of defined benefit plans

2,610-64,895

837-48,579

Total accumulated other comprehensive income-292,261-216,221

Total net assets
Total liabilities and net assets―7―

9,636,249

9,922,460

26,122,705

27,382,047

(2) [Quarterly Consolidated Statements of Income and Statements of Comprehensive Income][Quarterly Consolidated Statement of Income][Second Quarter of FY3/21]

Net sales
Cost of sales

Previous Second Quarter(Apr. 1, 2019
- September 30, 2019)15,517,301
13,668,091(Thousand yen)
Current Second Quarter(Apr. 1, 2020
- September 30, 2020)
15,955,842
13,824,713

Gross profit

1,849,209

2,131,129

Selling, general and administrative expenses

1,353,036

1,498,699

Operating income

496,173

632,430

Non-operating income
Interest income

50,492

42,774

224,2545,467

306,427-

Subsidy income
Guarantee commission received
Other

11,4696,110

Total non-operating income

291,683

355,312Interest expenses
Demobilization costs

29,2691,289

28,260-Other

12,938

3,997

Total non-operating expenses

43,49732,257

Non-operating expenses

Ordinary income

744,359

955,485

Extraordinary income
Gain on sales of fixed assets

-

1,606

Extraordinary income

-

1,606

1,215
3,894

0
115,907

Extraordinary loss
Loss on retirement of fixed assets
Impairment loss (on facilities)

5,109

115,907

Income before income taxes and others

Total extraordinary loss

739,250

841,184

Corporate, inhabitant and enterprise taxes

262,123

319,478

Income taxes-deferred-38,879-29,593

Total income tax

223,243

289,884

Net income

516,006

551,299

Net income attributable to owners of parent

516,006

551,299―8―

[Quarterly Consolidated Statement of Comprehensive Income][Second Quarter of FY3/21]
Previous Second Quarter(Apr. 1, 2019
- September 30, 2019)
516,006(Thousand yen)
Current Second Quarter(Apr. 1, 2020
- September 30, 2020)
551,299

Valuation difference on available-for- sale securities
Deferred gains or losses on hedges-4,252-2,64564,146-2,650Foreign currency translation adjustments
Remeasurements of defined benefit plans

2,893
14,149-1,772
16,316

Total other comprehensive income

10,14576,039526,151

627,339

526,151

627,339--

Net income
Other comprehensive income

Comprehensive income
BreakdownComprehensive income attributable to owners of parent
Comprehensive income attributable to owners of noncontrolling shareholders―9―(3) Notes on Quarterly Consolidated Financial Statements(Notes on going concern assumptions)
Second quarter of FY3/21 (April 1, 2020 – September 30, 2020)
Not applicable(Notes on significant changes in shareholders' equity)
Second quarter of FY3/21 (April 1, 2020 – September 30, 2020)
Not applicable―10―