BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 2nd QUARTER OF THE FISCAL YEAR ENDING MARCH 2021
This is an English translation of summarized consolidated financial results prepared
for the convenience of non-resident shareholders. Should there be any inconsistency
between the translation and the official Japanese text, the latter shall prevail.

November 13, 2020
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Jiro Saeki, CFO/Director
Tel: +81-3-6855-7811
Date of Submission of Securities Report: Nov. 13, 2020
Starting Date of the Dividend Payment: Dec. 10, 2020
Preparation of Supplementary Materials for Quarterly Financial Results: Applicable
Information Meeting for Quarterly Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the 2nd Quarter of the Fiscal Year Ending March 2021
(From April 1, 2020 to September 30, 2020)(1) Consolidated Operating Results(Percentages indicate changes compared with the same quarter of the previous fiscal year.)

Net Sales

Q2 of the year ending

Millionsof yenMarch 2021
March 2020

10,000
10,184

Operating Income%

Millionsof yen△1.8△3.9

Ordinary Income
Millionsof yen

%

552
334

65.0
52.9

%

667
383

74.1
97.3

Net Income
Millionsof yen

%
－
－

315
△373

(Note) Comprehensive income: 2nd quarter of the fiscal year ending March 2021: ¥1,362 million (—%); 2nd quarter of fiscal year ending
March 2020: △¥219 million (—%)

Net Income per
Share

Diluted Net
Income per Share

Yen
25.00
△28.16Yen——

Q2 of the year ending
March 2021
March 2020

(2) Consolidated Financial Position
Total Assets

Net Assets

Ratio of Equity CapitalMillions of yen

Millions of yen

26,225

17,736%67.6

24,746

16,43966.4

Q2 of the year ending
March 2021
Year ending March 2020

(Reference) Equity capital: 2nd quarter of fiscal year ending March 2021: ¥17,736 million; fiscal year ending March 2020: ¥16,439 million

2. Dividends
Dividends per Share
1st Quarter(Record dates)

Yen
—
—

Year ending March 2020
Year ending March 2021

3rd Quarter

Interim

Yen
5.00
5.00

Year ending March 2021
(Forecast)Year-end

Total

Yen
—

Yen
5.00

Yen
10.00

—

5.00

10.00

(Note) These figures have not been modified since the time of the most recently announced dividend forecast.

3. Forecast for the Consolidated Results for the Year Ending March 2021
（from April 1，2020 to March 31，2021）(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Full year

Operating Income

Ordinary Income

Net Income
Attributable to the
Shareholders of the
Parent Company

Millionsof yen%Millionsof yen%Millionsof yen%Millions ofyen%

20,000

△0.5

430

11.7

520

10.2

60

－

(Note) These figures have not been modified since the time of the most recently announced business result forecast.

1

Net Income
per ShareYen
4.75

* Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Applicable* For details, please refer to “2. Consolidated Financial Statements and Important Explanatory Notes, (4) Notes

Concerning the Consolidated Financial Statements (Adoption of Simplified Methods in the Preparation of theQuarterly Financial Statements)” on page 12 of the accompanying material.

(3) Changes in accounting policy, changes in accounting estimates, and restatements(i)
Changes accompanying revisions of accounting standards, etc.: None(ii) Changes other than the above: None(iii) Changes in accounting estimates: None(iv)

Restatements: None

(4) Outstanding shares (common shares)(i) Outstanding shares at the end of the term (including treasury shares):
The 2nd quarter of the fiscal year ending March 2021: 13,831,091 shares
The fiscal year ending March 2020: 13,831,091 shares(ii) Treasury shares at the end of the term:
The 2nd quarter of the fiscal year ending March 2021: 1,202,410 shares
The fiscal year ending March 2020: 1,201,840 shares(iii) Average number of shares during the interim accounting period:
The 2nd quarter of the fiscal year ending March 2021: 12,628,981 shares
The 2nd quarter of the fiscal year ending March 2020: 13,249,524 shares(Note) The number of shares of treasury stock at the end of the period includes the Company's sharescontributed as trust assets in the performance-based stock compensation plan (2nd quarter of fiscal year
ending March 2021: 262,500 shares, fiscal year ending March 2020: 262,500 shares).
Moreover, such shares are also included in the treasury shares that are deducted in calculating the average
number of shares during the period (the 2nd quarter of the fiscal year ending March 2021: 262,500 shares,
the 2nd quarter of the fiscal year ending March 2020: 43,750 shares).
* This financial results report is exempt from quarterly review procedures.
* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to “1. Qualitative Information Concerning the Settlement of Accounts for the 2nd Quarter,(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.” on page 5 of theaccompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental materials related to the Company’s quarterly and other financial results are posted on the company website.

2

Contents
1. Qualitative Information Concerning the Settlement of Accounts for the 2nd Quarter ····················(1) Explanation Concerning the Operating Results ····························································(2) Explanation Concerning the Financial Position ····························································(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc. ··

2
2
4
5

2. Consolidated Financial Statements and Important Explanatory Notes ······································ 6(1) Consolidated Balance Sheet ···················································································· 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ········ 8(Consolidated Statement of Income) ·········································································· 8(Consolidated Statement of Comprehensive Income)······················································· 9(3) Consolidated Statement of Cash Flows ······································································· 10(4) Notes Concerning the Consolidated Financial Statements ················································· 12(Note Concerning the Premise of a Going Concern) ························································ 12(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity) ··················· 12(Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements) ········ 12(Segment Information) ························································································· 13

1. Qualitative Information Concerning the Settlement of Accounts for the 2nd Quarter(1) Explanation Concerning the Operating Results
In the Japanese information and communications field in 2019, the Internet penetration rate remained
high at 89.8%, and the percentage of households owning one or more smartphones reached 83.4%,
exceeding the percentage of households that own personal computers (*1). In addition, while the movementaway from television has continued since the year 2000, mainly centered on younger people, advertisingexpenses for the Internet in Japan increased by 19.7% in 2019 from the previous year to ¥2,104.8 billion,
exceeding advertising expenses for television of ¥1,861.2 billion for the first time (*2). Moreover, due tothe impact of the spread of the novel coronavirus (COVID-19) pandemic, services that allow people tostay online while communicating at home are becoming widespread, and new lifestyle choices such as
teleworking and “contactless” consumer behavior are beginning to permeate society. Under thesecircumstances, it is expected that the shift to services in accordance with the era of digitalization willfurther accelerate as the Internet usage rate rises, smartphones become even more widespread, and G5
communication services develop.
*1. Source: Ministry of Internal Affairs and Communications, 2019 Telecommunications Usage Trend Survey Results*2. Source: Dentsu Inc., 2019 Advertising Expenditures in Japan

In the entertainment market in 2019, sales in the global music market centered on streaming services grewby 8.2% year-on-year to approximately ¥2,198.4 billion (US$20.2 billion), marking its fifth consecutive
year of sales growth (*3). Meanwhile in Japan, the production value of music software including music
videos decreased by 5% year-on-year to ¥229.1 billion, and sales of packaged products continued to
decline, but sales of fee-based music distribution increased by 10% to ¥70.6 billion (*4). In the paid music
distribution sales category, in the first quarter of 2020, streaming sales increased by 28% year-on-year toaccount for 75% of total paid music distribution sales (*5). On the other hand, large-scale events and live
concerts have been postponed and canceled due to the spread of COVID-19, and it is estimated that thesize of the live entertainment market in 2020 will shrink to less than 30% of the previous year's level (*6).
However, many artists are experimenting with new ways of enjoying live entertainment and their efforts
are beginning to permeate the market, such as “non-audience live distribution” concerts in which they
perform “live” without an audience at the venue and the sights and sounds of the performance are
distributed in real time to audiences via the Internet. It is estimated that the size of the digital live
performance market will reach ¥14 billion in 2020, and it is projected to grow rapidly to ¥31.4 billion in
2021, which is about 2.2 times the previous year's scale (*7).
*3. Source: IFPI, Global Music Report 2020 - THE INDUSTRY IN 2019*4. Source: Recording Industry Association of Japan (RIAJ), The Recording Industry in Japan 2020
*5. Source: Recording Industry Association of Japan (RIAJ), April-June 2020 music distribution sales quarterly figures*6. Source: PIA Research Institute, Japanese Live Entertainment Market Size Preliminary Report (published June 30, 2020)*7. Source: CyberZ Co., Ltd., Domestic Digital Live Entertainment Market Trend Survey

Founded in 1992, Faith was the first company in the world to commercialize ringtones, and has steadilygrown centered on the music distribution business and in step with the popularization of mobile phones.
However, the spread of smartphones in today’s music market has been accompanied by the diversificationof media such as streaming, user upload content (UUC) that allows general users to easily transmit
information to society, and social media, with the result that all kinds of activities in the music industry
are now changing, including content distribution methods, consumption styles and content production
methods.
In the current environment, the Faith Group is continuing to utilize the results of the efforts it has beenpouring into digital content distribution ever since its establishment, and is forging ahead with its MultiContent and Multi-Device Strategy of creating environments in which people can enjoy a wide diversityof contents whenever and wherever they choose. We are also strengthening the development of newservices in response to the changing market environment, which includes platforms that collect andorganize the information flooding the Internet and then providing this to users after increasing its added
value.
In June 2020, Faith launched a new service called Thumva, which is an innovative live performance
distribution platform with a variety of additional features. An Internet-based viewing service that provides
a new kind of live experience, Thumva makes possible group viewing and commenting, includes a gifting
function for artists, and allows the audience to share in the uplifting and united feeling of taking part in alive performance without actually being at the venue. A considerable number of artists have already2performed “live” on Thumva without a live audience, and we are planning to continue live broadcastingwith a variety of lineups in future. Around 120 performances have been distributed in the five months
since the service started, and the number of registered members exceeds 100,000 (as of October 2020).
At Tokyo's largest music lounge, the Faith-operated PLUSTOKYO, after taking necessary measures inaccordance with the Tokyo Metropolitan Infectious Disease Spread Prevention Guidelines, the facility is
gradually resuming operations on the main 12th floor following the reopening of the rooftop floor. In
addition, CROKET MIMIC TOKYO, an entertainment facility that provides world-class performances
centered on impersonation, has started live distribution of the original content produced using Thumva,
and in the future, we will continue to demonstrate synergistic effects among the Faith Group’s businesses.
Regarding the Faith Group’s business performance for the second quarter of the consolidated fiscal year
ending March 2021, sales in the Content Business continued to decrease in accordance with the decline
in sales of existing distribution services, which account for a major share of overall sales, and with thesuspension of store operations in order to prevent COVID-19 infections. In this situation, sales decreasedby 1.8% year-on-year to ¥10,000 million. As for profitability, in keeping with the improvement in the
profit margin of the Label Business, operating income increased by 65.0% year-on-year to ¥552 million
and ordinary income increased by 74.1% year-on-year to ¥667 million. Meanwhile, net income
attributable to shareholders of the parent company totaled ¥315 million (compared to a net loss
attributable to shareholders of the parent company of ¥373 million for the same period of the previousyear).
Information on each business segment is as follows.
Content BusinessIn the Content Business, while sales in the existing distribution business continue to decline, the FaithGroup is actively promoting business development in Asian countries and other markets where highgrowth rates are expected. In addition, we are interlinking and platforming various services in an effort
to develop new products and services and grasp diversified revenue opportunities, and we will continue
to invest in growth areas in future.
We are actively developing FaRao PRO not only as a service providing business BGM but also for sales
activities focused on expanding the functions necessary for store management, such as solutions andannouncement functions that make store-branding proposals. In addition to conventional products using
tablet devices, we have also released an app-version service that offers users reduced initial costs and weare working to strengthen retail store sales through collaboration with the Point Service Business.
Moreover, based on our Japanese service, we have started FaRao PRO services in Indonesia, and for the
future we are aiming to create and activate new BGM markets both in Japan and overseas.
In Fans’, our platform of services for artists based on the D2C (*8) business model, which is expected to
expand in future, we are enhancing the functions essential to artists’ musical activities such as official
website construction, music and video distribution, sales of artist goods, and fan club operation. We areworking to further expand the functions of Fans’ such as introducing a system that contributes to thecreation of communities by spreading information transmitted by creators through strengthened
cooperation with SNS. We are also aiming to acquire new users and expand the membership base of Fans’
as a service that allows more artists to disseminate their works and information freely, and we will
endeavor to improve the quality of the service by pursuing enhanced convenience.
*8. Abbreviation of “Direct to Consumer”—a business model for delivering services and products planned and manufactured by Faith directly to users

Regarding the performance of this segment, due to a decrease in carrier official website service sales andto the suspension of store operations in line with the spread of COVID-19 infections, the Content Businessrecorded net sales of ¥1,465 million (a decrease of 21.0% year-on-year), and an operating loss of ¥284
million (compared with an operating loss of ¥315 million for the same period of the previous fiscal year).

3

Point Service BusinessIn the Point Service Business, in addition to providing point issue services to retail stores, we offer total
support for point issue data acquisition, analysis and sales promotion utilization as a series of cycles fromplanning to operation, and we provide outsourcing services that maximize retail sales promotion
efficiency.
Regarding the performance of this segment, the issue of points at existing member stores increased
substantially, with the result that net sales increased by 22.3% year-on-year to ¥1,753 million andoperating income increased by 132.1% year-on-year to ¥174 million.
Label Business
Amid the difficult environment facing the music and video-related industry in line with the continuing
shrinkage of the music market, the Label Business is proceeding with its strategy of strengthening new
future-oriented businesses in order to overcome the present situation in which it remains dependent onsales of package products for which the market remains sluggish. In order to continue to play a major rolein the music industry in future and expand its revenue, in addition to pursuing the creation of hit products,
artist management, and investment in the live performance business, we consider it necessary to introduce
new services that anticipate the ever-changing market environment.
Regarding the performance of this segment, sales decreased by 1.6% year-on-year to ¥6,782 million due
to delays in releases of titles and to a decrease in the activities of affiliated artists in the course of theeffort to prevent the spread of COVID-19 infections. However, operating income increased by 15.4%
year-on-year to ¥660 million thanks to strong sales of animation titles and to an increase in sales of highmargin titles released in previous years.
*Product and service names appearing in this document are trademarks or registered trademarks of Faith, Inc. either in Japan or in othercountries.

(2) Explanation Concerning the Financial Position(Analysis of Financial Position)
As of the end of the second quarter of the current consolidated fiscal year ending March 2021 (September
30, 2020), total assets increased by ¥1,478 million compared to the end of the previous consolidated fiscal
year to ¥26,225 million. This result was mainly due to an increase in investment securities.
Total liabilities increased by ¥181 million compared to the end of the previous consolidated fiscal year to¥8,489 million. This result was mainly due to a decrease of ¥350 million in accounts and notes payable,
an increase of ¥199 million in asset retirement obligations (current liabilities), an increase of ¥451 million
in deferred tax liabilities, and a decrease of ¥67 million in other fixed liabilities.
Net assets increased by ¥1,297 million compared to the end of the previous consolidated fiscal year to¥17,736 million. This was mainly due to the recording of a quarterly net income attributable to theshareholders of the parent company and to an increase in the valuation difference on other securities.
As a result of the above, the equity ratio increased by 1.2 percentage points to 67.6%.
(Cash Flow Situation)
The balance of cash and cash equivalents at the end of the second quarter of the current consolidated fiscal
year was ¥13,333 million, an increase of ¥748 million from the end of the previous consolidated fiscal
year. Details of cash flow for the consolidated cumulative second quarter and its contributory factors are
as follows:(Cash Flow from Operating Activities)
Cash flow from operating activities amounted to an inflow of ¥934 million (compared with an inflow of¥1,093 million for the same period of the previous fiscal year), due mainly to the recording of ¥635 million
in respect of a gain in net income before income taxes and other adjustments, ¥109 million in respect ofdepreciation expenses, ¥172 million in respect of an increase in the reserve for bonuses, ¥569 million in
respect of a decrease in trade receivables, ¥190 million in respect of a decrease in inventory assets, ¥372
million in respect of a decrease in trade payables, and ¥271 million in respect of payment of income taxes,etc.

4(Cash Flow from Investing Activities)
Cash flow from investing activities amounted to an inflow of ¥27 million (compared with an outflow of¥404 million for the same period of the previous fiscal year), due mainly to the recording of ¥18 million
in respect of expenditure for the acquisition of tangible fixed assets, ¥35 million in respect of expenditure
for the acquisition of software, and ¥76 million in respect of income from the distribution of profits frominvestment partnerships, etc.
(Cash Flow from Financing Activities)
Cash flow from financing activities amounted to an outflow of ¥211 million (compared with an inflow of¥519 million for the same period of the previous fiscal year), due mainly to expenditure in respect of
repayment of long-term borrowing.

(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
Performance forecasts are made based on information currently available to the Company, but there is apossibility that the actual performance figures will differ significantly from the forecast figures due to avariety of factors. In addition, the current performance forecast for the full financial year is unchanged
from the forecast issued on November 11, 2020.

5

2. Consolidated Financial Statements and Important Explanatory Notes(1) Consolidated Balance Sheet
FY 2019(As of March 31, 2020)(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Corporation tax refund receivable, etc.
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Goodwill
Other fixed assets
Total intangible fixed assets
Investment and other assets
Investment securities
Deferred tax assets
Other intangible fixed assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Accounts and notes payable
Short-term loans payable
Accrued expenses payable
Income taxes payable
Reserve for bonuses
Reserve for point card certificates
Reserve for sales returns
Asset retirement obligations
Other current liabilities
Total current liabilities
Fixed liabilities
Long-term loans payable
Net defined retirement benefits
Reserve for stock benefits for directors
Asset retirement obligations
Deferred tax liabilities
Other fixed liabilities
Total fixed liabilities
Total liabilities

6(Unit: thousands of yen)
2nd Quarter of FY 2020

(As of Sept. 30, 2020)

12,635,849
2,199,541
230,879
446,811578,771
75,973
68,295
482,059△18,532
16,699,651

13,383,858
1,550,211
231,715
307,780
548,965
54,2090643,984△19,018
16,701,708

2,646,472

2,816,679

1,520,453
455,507
1,975,960

1,458,074
437,908
1,895,983

2,145,096
765,419
1,037,457△523,083
3,424,888
8,047,321
24,746,972

3,603,774
726,551
1,029,327△548,267
4,811,386
9,524,048
26,225,756

1,039,823
609,900
2,725,341
341,858
347,424
364
90,279
－1,531,411
6,686,405

689,561
568,700
2,743,128
303,829
263,861376
46,033
199,875
1,785,922
6,601,288

440,350
652,153
16,401
39,183
333,275
140,191
1,621,554
8,307,960

334,200
633,451
23,24039,183785,085
72,856
1,888,017
8,489,306

(Net assets)
Shareholder's equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholder's equity
Other accumulated comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Cumulative adjustment for retirement benefit
obligations
Total other accumulated comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7(Unit: thousands of yen)
2nd Quarter of FY 2020

FY 2019(As of March 31, 2020)(As of Sept. 30, 2020)

3,218,000
2,840,095
10,854,165△1,124,344
15,787,916

3,218,000
2,840,084
11,105,468△1,124,793
16,038,760

737,236△21,026△65,114

1,765,396△21,949△45,756

651,096－
16,439,012
24,746,972

1,697,690－
17,736,450
26,225,756

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Unit: thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Interest on securities
Gain on equity method investment
Gain on investment partnership management
Gain on valuation of investment securities
Grant income
Miscellaneous receipts
Total non-operating income
Non-operating expenses
Interest paid
Loss on investment partnership management
Loss on valuation of investment securities
Loss on foreign exchange
Miscellaneous expenses
Total non-operating expenses
Ordinary income
Extraordinary losses
Loss on disposal of fixed assets
Loss on sale of investment securities
Loss on valuation of investment securities
Total extraordinary losses
Net income or net loss before income taxes (△ = net loss)
Corporate, local, and business taxes
Income taxes - deferred
Current quarter net income or net loss (△ = net loss)
Current quarter net income attributable to non-controllinginterests
Current quarter net income or net loss attributable toshareholders of the parent company (△ = net loss)

8

2nd Quarter of FY 2019

2nd Quarter of FY 2020

(April 1-Sept.30, 2019)10,184,452
6,313,497
3,870,954
3,536,220
334,734(April 1-Sept. 30, 2020)
10,000,737
6,286,940
3,713,796
3,161,335
552,461

149
3,005
73
24,14041,014
3,177
－
6,938
78,499148
3,053
838,03178,0101,114
31,66422,872
174,903

2,979
9,556
432
9,866
7,011
29,845383,388

3,094
50,282－289
6,059
59,726
667,638102－
549,999
550,102△166,713
211,488△5,088△373,114
－

672
4,931
26,75732,360635,277
280,980
38,534
315,762－△373,114

315,762(Consolidated Statement of Comprehensive Income)(Unit: thousands of yen)

Current quarter net income or net loss (△ = net loss)
Other comprehensive income
Valuation difference on other available-for-salesecurities
Foreign currency translation adjustments
Retirement benefit adjustments
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to non-controllinginterests

9

2nd Quarter of FY 2019

2nd Quarter of FY 2020

(April 1-Sept. 30, 2019)△373,114(April 1-Sept. 30, 2020)
315,762

149,711

1,028,159△10,420
14,737
154,028△219,085△923
19,3581,046,594
1,362,356△219,085

1,362,356－－

(3) Consolidated Statement of Cash Flows(Unit: thousands of yen)

Cash flow from operating activities
Gain or loss before income taxes and other adjustments (△ =loss)
Depreciation expenses
Amortization of goodwill
Increase/decrease in allowance for doubtful accounts (△ =decrease)
Increase/decrease in reserve for bonuses (△ = decrease)
Increase/decrease in reserve for point card certificates (△ =decrease)
Increase/decrease in liabilities for retirement benefits (△ =decrease)
Increase/decrease in reserve for stock benefits for directors (△= decrease)
Interest and dividend income
Gain or loss on valuation of securities (△ = gain)
Interest on securities
Interest paid
Grant income
Gain or loss on foreign exchange (△ = gain)
Gain or loss on equity method investment (△ = gain)
Gain or loss on investment partnership management (△ =gain)Gain or loss on sale of investment securities (△ = gain)
Gain or loss on valuation of investment securities (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Increase/decrease in trade receivables (△ = increase)
Increase/decrease in inventory assets (△ = increase)
Increase/decrease in trade payables (△ = decrease)
OthersSub-total
Grants received
Interest and dividends received
Interest paid
Income tax refunded
Income tax paid
Cash flow from operating activities

10

2nd Quarter of FY 2019
(April 1-Sept. 30, 2019)

2nd Quarter of FY 2020
(April 1-Sept. 30, 2020)△166,713

635,277

156,036
52,94924,957

109,936
62,37825,6703,351
345

172,270
11

7,378△18,701－

6,839△3,154△2,745
△73
2,979
－
1,104
△24,140△31,458△3,201△1,114△8
3,094△31,66446△38,031△27,727－
549,999
12
588,080△120,201
3,881△92,541
950,048－
3,228△2,575
210,963△68,094
1,093,570

4,931
26,757672
569,359
190,600△372,834△181,154
1,133,406
5,204
2,652
△3,094
68,295△271,813
934,650

(Unit: thousands of yen)

Cash flow from investing activities
Expenditure for acquisition of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of investment securities
Income from distribution of profits from investment
partnerships
Income from collection of loans receivable
Income from collection of security deposits
OthersNet cash flow from investing activities
Cash flow from financing activities
Net increase/decrease in short-term loans payable (△ =decrease)
Expenditure for repayment of financing and lease obligations
Expenditure for repayment of long-term borrowing
Income from long-term borrowing
Expenditure for acquisition of treasury stock
Income from disposal of treasury stock
Payment of dividends
Net cash flow from financing activities
Effect of exchange rate on cash and cash equivalents
Net increase/decrease in cash and cash equivalents (△ =decrease)
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of the quarter11

2nd Quarter of FY 2019
(April 1-Sept. 30, 2019)

2nd Quarter of FY 2020
(April 1-Sept. 30, 2020)△59,509△70,383△280,000
2,418△18,425△35,982△25,000
76,899

265
37
3,030
△404,141180
430,28827,964112,600－△361△108,999
624,900△231,611
189,000△66,032
519,493△10,486
1,198,436－△147,350－△495
35△64,142△211,951△2,654
748,008

12,100,452※ 13,298,888

12,585,834※ 13,333,843

(4) Notes Concerning the Consolidated Financial Statements(Note Concerning the Premise of a Going Concern)
Not applicable(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Not applicable(Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements)
Tax expenses for the Company and a portion of its consolidated subsidiaries are calculated by making areasonable estimate of the effective tax rate after applying tax effect accounting to the amount of quarterly
net income before tax deduction for the current consolidated financial year including the second quarter,and then multiplying the amount of quarterly net income before tax deduction by the current estimatedeffective tax rate.

12

(Segment Information)
Ⅰ 2nd quarter of the previous consolidated fiscal year/FY 2019 (April 1, 2019 through Sept. 30, 2019)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)Amount recorded in
Adjustment
Consolidated Financial
amount (Note 1) Statements (Note 2)Content

Point Service

Label

Total

1,855,128

1,433,580

6,895,743

10,184,452－

10,184,452

57,41997

3,940

61,457△61,457－

Total

1,912,547

1,433,678

6,899,683

10,245,910△61,457

10,184,452

Segment income orloss (△)△315,979

75,099572,952

332,072

2,662

334,734

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amountNotes: 1. The segment income or loss ( △ ) adjustment amount of ¥2,662 thousand is calculated by eliminating intersegment
transactions.
2. Segment income or loss amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.
Ⅱ 2nd quarter of the current consolidated fiscal year/FY 2020 (April 1, 2020 through Sept. 30, 2020)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)Content

Point Service

Label

Total

Amount recorded in
Adjustment
Consolidated Financial
amount (Note 1) Statements (Note 2)

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount

1,465,013

1,753,302

6,782,421

10,000,737－

10,000,737

107,16892

10,563

117,824△117,824－

Total

1,572,181

1,753,395

6,792,984

10,118,561△117,824

10,000,737

Segment income orloss (△)△284,807

174,339

660,907550,439

2,022

552,461

Notes: 1. The segment income or loss ( △ ) adjustment amount of ¥2,022 thousand is calculated by eliminating intersegment
transactions.
2. Segment income or loss amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.

13