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.

Non-consolidated Financial Results
for the Nine Months Ended June 30, 2024
(Under Japanese GAAP)
July 25, 2024
Company name: STEP CO.,LTD.
Listing: Tokyo Stock Exchange
Securities code: 9795
URL: https://www.stepnet.co.jp/
Representative: Yousuke Endou, Representative Director and President
Inquiries: Noriaki Arai, Director and Managing Executive Officer
Telephone: +81-466-20-8000
Scheduled date to commence dividend payments:―

Preparation of supplementary material on financial results: None
Holding of financial results briefing: None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Non-consolidated financial results for the nine months ended June 30, 2024 (from October 1, 2023 to June 30, 2024)(1) Non-consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)

Net sales
Nine months ended
June 30, 2024
June 30, 2023

Operating profit% Millions of yen

Millions of yen

11,182
10,706

4.5
7.0

Basic earnings
per share
Nine months ended
June 30, 2024
June 30, 2023

Ordinary profit% Millions of yen

2,729
2,321

17.6
(9.4)

Profit% Millions of yen

2,774
2,333

18.9
(10.8)

1,905
1,627

%

17.1
(9.6)

Diluted earnings
per share
Yen

Yen

117.6698.21――(2) Non-consolidated financial position
Total assets
As ofEquity-to-asset ratio

Millions of yen

Millions of yen%

28,43828,63425,89025,93691.0
90.6

June 30, 2024
September 30, 2023
Reference:

Net assets

EquityAs of June 30, 2024: ¥ 25,890million
As of September 30, 2023: ¥ 25,936million

2. Cash dividends
Annual dividends per shareFirst quarter-end
Yen

Second quarter-end

Third quarter-end

Yen

Yen

Yen

Yen

―

48.00

72.00

37.00

74.00

Fiscal year ended―
24.00
September 30, 2023
Fiscal year ending―
37.00
September 30, 2024
Fiscal year ending
September30, 2024
(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: None

Fiscal year-end

Total

―

3. Non-consolidated financial results forecast for the fiscal year ending September 30, 2024 (October 1, 2023 to September 30, 2024)(% indicates changes from the previous corresponding period.)

Net sales
Millions of yen%

Millions of yen

14,892

3.1

3,338

Full year
Note:

Operating profit

Ordinary profit

ProfitProfit per share% Millions of yen% Millions of yen

%

Yen

4.6

5.4

0.2

149.89

3,398

2,409

Revisions from financial results forecasts announced most recently: None

*Note(1) Adoption of accounting treatment specific to the preparation of quarterly non-consolidated financial statements: None

(2) Changes in accounting policies, changes in accounting estimates, and restatement(ⅰ)

Changes in accounting policies due to revisions to accounting standards and other regulations: None(ⅱ)

Changes in accounting policies due to other reasons: None(ⅲ) Changes in accounting estimates: None(ⅳ) Restatement: None

(3) Number of issued shares (common shares)(ⅰ) Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2024

16,670,000 shares

As of September 30, 2023

16,670,000 shares(ⅱ) Number of treasury shares at the end of the period
As of June 30, 2024

655,958 shares

As of September 30, 2023

356,922 shares(ⅲ) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Nine months ended June 30, 2024

16,196,341 shares

Nine months ended June 30, 2023

16,573,163 shares* Review of the Japanese-language originals of the attached quarterly non-consolidated financial statements by certified public
accountants or an audit firm: Yes (voluntary)* Proper use of earnings forecasts, and other special matters
The statements regarding forecast of financial results in this report are based on the information that is available to the Company, as
well as certain assumptions that are deemed to be reasonable by management, and they are not meant to be a commitment by theCompany. Therefore, there might be cases in which actual results differ materially from forecast values due to various factors. For the
suppositions that from the assumptions for earnings forecasts and cautions concerning the use thereof, please refer to “Qualitative
Information on the Quarterly Financial Results (3) Explanation of forward-looking statements including business forecasts” on page 4of this report.

Table of Contents of Appendix

1. Qualitative Information on the Quarterly Financial Results ……………………………………………………………2(1) Explanation of Operating Results ……………………………………………………………………………………2(2) Explanation of Financial Condition …………………………………………………………………………………4(3) Explanation of forward-looking statements including business forecasts……………………………………………4
2. Quarterly Financial Statements and Principal Notes …...…………………………………………………………………5(1) Quarterly Balance Sheets ……………………………………………………………………………………………5(2) Quarterly Statements of income ………………………………………………………………………………………7(3) Notes to Quarterly Financial Statements ……………………………………………………………………………8(Notes on going concern assumption) …………………………………………………………………………………8(Notes on significant changes in the amount of shareholders’ equity) ………………………………………………8(Segment information, etc.) ……………………………………………………………………………………………8(Notes to Statements of Cash Flows) …………………………………………………………………………………8
3. Supplementary Information ………………………………………………………………………………………………8(1) Results of production and orders received …………………………………………………………………………… 8(2) Sales results ……………………………………………………………………………………………………………8―1―

1. Qualitative Information on the Quarterly Financial Results(1) Explanation of Operating Results
Our company’s third quarter (April to June) begins with the new school year enrollment period in April after
receiving the results of the entrance examination in March. Recruitment for the new school year is healthy, and thenumber of students is growing. As of the end of June 2024, the total number of students increased 4.3% year on
year. In addition, the average number of students during the third quarter was 33,314 (up 3.6% year on year).
When divided by grade, the number of students in the group class from 5th grade elementary school students to
3rd grade high school students, which account for the majority of students, was up year on year in all classes as ofthe end of June. In particular, recruitment for 5th grade elementary school students was healthy. One of the reasons
behind this is that many schools have grades full to capacity with junior high school students, so families whichwant to secure a spot early in such areas are applying while their children are still elementary school students. In
addition, in the background is the increasing need for learning with additional value to be gained after enteringjunior high school and the growing need for enhanced learning not limited to entrance exams in households
planning to have their children enter public junior high schools amid intensifying competition with private juniorhigh schools in the Tokyo metropolitan area.
The results of entrance exams this spring were favorable, which helped to increase student recruitment.
We became the top tutoring school in terms of the number of students that passed the exam at many top andhighly-ranked public high schools in Kanagawa including Yokohama-Suiran Senior High School and Shonan
Senior High School, which are the most difficult public high schools to enter in Kanagawa. We continued tooutperform other tutoring schools also this spring. In particular, 1,320 students passed the entrance exams for the 8
preparatory schools in Kanagawa that are particularly focused on improving academic performance (YokohamaSuiran, Shonan, Hakuyo, Kawawa, Atsugi, Yokohama-Midorigaoka, Tama and Odawara high schools), and thenumber of STEP students who passed the entrance exam was the largest for 7 out of the 8 schools among all thetutoring schools. Furthermore, STEP students accounted for 50.9% (over half) of all of the students who passed theentrance exams for the above 8 preparatory schools (2,595 students). Also, for “schools nominated as candidates forschools particularly focused on improving academic performance,” which are top or quasi-top schools that conduct
the special “tokushoku kensa test” (writing test) like the above 8 preparatory schools, the number of STEP students
who passed the entrance exam was the largest for 8 out of 10 schools, and a total of 1,187 STEP students passed theentrance exams for 10 schools. (STEP students accounted for 41.3% of all of the students admitted to the 10
schools (2,872 students)).
In addition, the number of students who have passed the exam at Tokyo Gakugei University Senior High School,
which is a co-ed national high school and has the most difficult entrance exam among the schools within the schoolcommuting area for our students, has reached 214 (excluding returnees and internal admissions; 152 passers,
excluding waitlisted applicants, account for 55.5% of a total of 274 students who passed the exam). We have thelargest number of students who passed the school among all tutoring schools for 16 consecutive years.
The university entrance examination course (for high school students) was successful also this spring. We wereable to pass 14 students for the University of Tokyo, 4 students for Kyoto University, 12 students for Hitotsubashi
University, and 18 students for Tokyo Institute of Technology. In addition, 8 students also passed the Medical
Faculty/Department of national and public universities, and the number of students passing the entrance exams for
all national and public universities reached 354 (up 30 from 324 in the previous fiscal year), renewing a record highalso this spring. As for the private universities, a total of 594 students passed the entrance exams at Waseda, Keio,and Sophia universities (up 134 from 460 in the previous fiscal year), reaching a record high, and a total of 2,219
students passed the entrance exams at the so-called Ridai MARCH (Tokyo University of Science, Meiji, Aoyama
Gakuin, Rikkyo, Chuo, and Hosei) (up 227 from 1,992 in the previous fiscal year), also resulting in a renewedrecord high.
Most of these pass results are achieved by public high school students in Kanagawa, which is one of ourcharacteristic aspects of successful university entrance exams. 43 out of 48 students admitted to the University of―2―Tokyo, Kyoto University, Hitotsubashi University, and Tokyo Institute of Technology were from public highschools. It is generally considered that public high schools tend to be inferior to private high schools in their pass
results in the Tokyo metropolitan area. However, because we built a certain study system and structure for entrance
exams, the number of public high school students who passed the first-choice universities was able to be increased.
The successful results achieved also in this spring can be proved to be very meaningful for us.
In the after-school care course, the number of students in all four schools is increasing compared with theprevious fiscal year, STEP Kids Chigasaki School (Chigasaki City), too, is expected to move into the black, in
addition to the two schools in Fujisawa City. STEP Kids Hakuraku School, which was opened in the previous fiscal
year as the first STEP school in Yokohama City, entered the second year. We are brushing up our operation in
Yokohama City, where a public after-school childcare facility is established for each elementary school,
accumulating know-how for business operation in Yokohama City, and increasing the number of students steadily.
While refining this rich and diverse content, each school will accumulate, share and standardize their operational
know-how to build a foundation for future expansion of the after-school care course throughout the prefecture.
During the current fiscal year, four new schools in the high school entrance examination course were opened in
March. We have opened 2 schools in Kawasaki City and 2 schools in Yokohama City, including Kashimada Schoolfor the STEP high school entrance examination course (Saiwai Ward, Kawasaki City), Hi-STEP Shin-yurigaoka
School (Asao Ward, Kawasaki City), Higashi-Totsuka Hirado School for the STEP high school entrance
examination course (Totsuka Ward, Yokohama City), and Hiyoshi-honcho School for the STEP high school
entrance examination course (Kohoku Ward, Yokohama City). The recruitment for these new schools is favorable.
In our case, it is common for the number of students to gradually increase in our newly opened schools. However,
several schools have grades and classes full to capacity even directly after opening. All four of these schools are off
to a good start. We will continue to provide fun and satisfactory classes and attentive support to further increase thenumber of students in these schools during the summer courses starting in late July.
The number of students in our existing schools is healthy, and we will further enhance the trust from
communities for our existing schools and work to improve their occupancy level. We plan to continue to consider
adding classes, increasing floor space and relocating school buildings where we have not been able to accept
enrollment requests due to full capacity. We increased floor space in Sagami-ono School in November 2023 andYokosuka School in March 2024 for the STEP university entrance examination course. We also plan to increase
floor space in Yokohama School in December this year. Fujisawa School is the school with the largest number ofstudents for the STEP university entrance examination course. However, Yokohama School with the second largest
number of students continues to be full to capacity even though we have increased floor space several times. It is
expected that the number of students at the school will increase further in the future. We will continue to strive tobe able to accept those who wish to join us without making them wait by improving our readiness to accept highschool students from the Yokohama area on an ongoing basis.
In the third quarter, we recorded net sales of 11,182 million yen (up 4.5% year on year), operating profit of 2,729
million yen (up 17.6% year on year), ordinary profit of 2,774 million yen (up 18.9% year on year), and profit of
1,905 million yen (up 17.1% year on year).

―3―(2) Explanation of Financial Condition(Assets)
Total assets at the end of the third quarter stood at 28,438 million yen, a decrease of 195 million yen from theend of the previous fiscal year.
Current assets decreased 381 million yen from the end of the previous fiscal year to 9,776 million yen becauseof a decrease in cash and deposits, despite an increase in accounts receivable-trade.
Non-current assets increased 186 million yen from the end of the previous fiscal year to 18,662 million yen
because of an increase in investment securities, despite a decrease in buildings.
(Liabilities)
Liabilities at the end of the third quarter decreased 149 million yen from the end of the previous fiscal year to
2,548 million yen.
Current liabilities decreased 73 million yen from the end of the previous fiscal year to 1,940 million yen
because of a decrease in advances received, deposits received, despite an increase in income taxes payable,
provision for bonuses.
Non-current liabilities decreased 76 million yen from the end of the previous fiscal year to 608 million yen,mainly due to a decrease in long-term borrowings.
(Net assets)
Net assets at the end of the third quarter decreased 45 million yen from the end of the previous fiscal year to25,890 million yen, mainly due to the payment of dividends, purchase of treasury shares, despite the recording ofquarterly profit.
As a result, the equity ratio was 91.0%, up 0.4 percentage points from the end of the previous fiscal year.
(3) Explanation of forward-looking statements including business forecasts
The forecasts for the fiscal year ending September 30, 2024 remain unchanged from those stated in the “Nonconsolidated Financial Results for the Fiscal Year Ended September 30, 2023 [Japanese GAAP]” dated October 31,
2023.
From now on, our challenge is to form a network in Kawasaki City, which has the most student-age populationnext to Yokohama City in Kanagawa Prefecture, and also a school network in the eastern, coastal, and southernareas in Yokohama City such as Tsurumi Ward, Naka Ward, Minami Ward, and Kanazawa Ward, where we have notbeen able to operate our business sufficiently.
To strategically focus on Yokohama City and Kawasaki City, where there is still much room for opening schools,
and form a strong school network, we need to further increase the number of students who pass Yokohama-Suiran
Senior High School and Tama Senior High School, which are rated as top public schools in the
Yokohama/Kawasaki area, and also need to be even more strongly recognized as a topnotch tutoring school thatoffers best teaching.

―4―2. Quarterly Financial Statements and Principal Notes(1) Quarterly Balance Sheets(Thousands of yen)
As of September 30, 2023

As of June 30, 2024

AssetsCurrent assets
Cash and deposits

9,725,936

9,063,390

Accounts receivable-trade
Inventories

83,13637,762

185,548
50,444

Other311,589

477,769

Allowance for doubtful accounts

(440)

(511)

10,157,983

9,776,641

Buildings, net

7,444,007

7,308,575

Land
Other, net

8,616,896
210,006

8,616,896
197,568

Total property, plant and equipment

16,270,910

16,123,040

67,015

119,043

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
Investments and other assets
Leasehold and guarantee deposits
Other
Total investments and other assets

643,147

661,661

1,495,031

1,758,550

2,138,178

2,420,212

18,476,104

18,662,296

28,634,088

28,438,937

Current portion of long-term borrowings
Lease obligations
Accounts payable-other
Income taxes payable
Provision for bonuses
Other104,700
18,537
185,181385,403
99,3891,220,337

104,700
18,320198,742551,306
337,189
730,051

Total current liabilities

2,013,547

1,940,310

140,600
48,036
129,800
351,726
14,33062,07537,310129,800
364,793
14,428684,492

608,406

2,698,040

2,548,717

Total non-current assets
Total assets
Liabilities
Current liabilities

Non-current liabilities
Long-term borrowings
Lease obligations
Provision for retirement benefits for directors
Asset retirement obligation
Other
Total non-current liabilities
Total liabilities―5―

(Thousands of yen)
As of September 30, 2023

As of June 30, 2024

Net assets
Shareholders’ equity
Capital stock
Capital surplus

1,778,330
2,131,859

1,778,330
2,131,859

Retained earnings

22,624,220

23,147,792

Treasury shares(603,391)(1,178,303)

Total shareholders’ equity

25,931,017

25,879,678

Valuation difference on available-for-sale securities

5,029

10,542

Total valuation and translation adjustments

5,029

10,54225,936,047

25,890,220

28,634,088

28,438,937

Valuation and translation adjustments

Total net assets
Total liabilities and net assets―6―

(2) Quarterly Statements of income
Nine months Ended June 30(Thousands of yen)
For the nine months ended
June. 30, 2023

For the nine months ended
June. 30, 2024

Net sales

10,706,164

11,182,633

Cost of sales

7,763,771

7,784,091

Gross profit

2,942,393

3,398,541

620,920

668,547

2,321,472

2,729,994

Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income

1954

Subsidy income

19,293

19,530Rental income from buildings

81,75280,590Other

10,01912,384

Total non-operating income

111,084

112,560

Interest expenses
Rental expenses

431
75,411300
65,051

Other

23,034

3,161

Total non-operating expenses

98,876

68,513Non-operating expenses

Ordinary profit

2,333,680

2,774,041

Extraordinary income
Gain on sale of non-current assets

56,909―Total extraordinary income

56,909―Loss on sale of non-current assets
Other

20,486160―

Total extraordinary losses

20,647―

Profit before income taxes

2,369,942

2,774,041

Income taxes-current
Income taxes-deferred

825,917(83,651)

953,039(84,681)

Extraordinary losses

Total income taxes
Profit―7――742,266

868,358

1,627,675

1,905,683

(3) Notes to Quarterly Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Notes on significant changes in the amount of shareholders’ equity)
There is no relevant information.
(Segment information, etc.)
Description is omitted because the Company operates in a single segment of tutoring schools.
(Notes to Statements of Cash Flows)
We have not produced the quarterly statement of cash flows for the third quarter under review. Depreciationin the third quarter under review (including depreciation related to intangible assets) is as described below.
For the nine months ended
June. 30, 2023

For the nine months ended
June. 30, 2024

(Thousands of yen)(Thousands of yen)

Depreciation

386,926

394,180

3. Supplementary Information
Status of production, orders and sales(1) Results of production and orders received
Our business is conducting classes to students, so there are no relevant items regarding results of production
and orders received.
(2) Sales results
As we have a single segment of the tutoring school business, we have no other segments subject to disclose.
Sales results for the nine months of the fiscal year under review are shown below by business segment.

Segment

Nine months ended
June 30,2024(Thousands of yen)

Year-on-year changes(%)

High school entrance examination course

8,856,232

103.7

University entrance examination course

2,326,400

107.4

11,182,633

104.5

Total

―8―