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April 15, 2024

Consolidated Financial Results
for the Fiscal Year Ended February 29, 2024
(Under Japanese GAAP)
Company name:
ARCS COMPANY,LIMITED
Listing:
Tokyo Stock Exchange / Sapporo Stock Exchange
Securities code:
9948
URL:
https://www.arcs-g.co.jp/
Representative:
Yokoyama Kiyoshi, Representative Director and President
Inquiries:
Furukawa Koichi, Director,Executive Vice President,in charge of Administration and Corporate Division
Telephone:+81-11-530-1000
Scheduled date of annual general meeting of shareholders:
May 28, 2024
Scheduled date to commence dividend payments:
May 29, 2024
Scheduled date to file annual securities report:
May 28, 2024
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (For institutional investors and investment analysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended February 29, 2024 (from March 1, 2023 to February 29, 2024 )(Percentages indicate year-on-year changes.)(1) Consolidated operating results
Net sales
Fiscal year ended
February 29, 2024
February 28, 2023

Operating profit

Profit attributable to owners ofparentOrdinary profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

591,557

4.5

16,831

13.5

18,43912.1

11,76618.3

566,209-

14,835-

16,444

(5.0)

9,947

(3.5)

Note: Comprehensive income For the fiscal year ended February 29, 2024: ¥ 14,626 million
For the fiscal year ended February 28, 2023: ¥ 11,532 million
Basic earnings per share
Fiscal year ended
February 29, 2024
February 28, 2023

Diluted earnings per share[ 26.8 % ][ 14.7 % ]Ratio of ordinary profit tototal assets

Return on equity

Ratio of operating profit
to net sales

Yen

Yen

%

%

%

214.03

-

6.7

6.8

2.8

177.47

-

5.9

6.3

2.6

Reference: Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended February 29, 2024: ¥ 53 million
For the fiscal year ended February 28, 2023: ¥ 46 million(Note) "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others are applied from the beginning of the previous fiscal year, andeach figure for the fiscal year ending February 28, 2023 is the figure after applying such accounting standards. The percentages of increase or decrease in net sales andoperating income from the previous period are not shown due to the different accounting methods used for comparative purposes. However, the percentages of increase or
decrease in net sales and operating income from the previous period for the fiscal year ending February 28, 2023, calculated on the assumption that the relevant accounting
standards were applied in the fiscal year ending February 28, 2022, are as follows.
Net sales up 1.7%, operating income down 6.9
Since the adoption of this accounting standard had only a negligible effect on ordinary income and net income attributable to owners of the parent, the percentage change fromthe previous year is shown.

(2) Consolidated financial position
Total assets
As ofFebruary 29, 2024
February 28, 2023

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

274,972

177,80964.7

3,293.94

266,155

171,68664.5

3,066.86

Reference: Equity
As of February 29, 2024: ¥ 177,809 million
As of February 28, 2023: ¥ 171,686 million(3) Consolidated cash flows
Cash flows from operating
activities
Fiscal year ended
February 29, 2024
February 28, 2023

2. Cash dividends

Cash flows from investing
activities

Cash flows from financing
activities

Cash and cash equivalents at endof period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

24,052(10,647)(11,267)

74,731

16,989(7,768)(2,801)

72,594

2. Cash dividends
Annual dividends per share
SecondThird
Fiscalquarter-end
quarter-end
year-endFirst
quarter-end
Fiscal year ended
February 28, 2023
Fiscal year ended
February 29, 2024
Fiscal year ending
February 28, 2025
(Forecast)

Total cash dividends(Total)Total

Ratio of dividends
to net assets(Consolidated)

Payout ratio(Consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

-

28.00

-

30.00

58.00

3,247

32.7

1.9

-

29.00

-

39.00

68.00

3,699

31.8

2.1

34.00

68.00

34.00

31.6

3. Forecast of consolidated financial results for the fiscal year ending February 28, 2025 (from March 1, 2024 to February 28, 2025)(Percentages indicate year-on-year changes.)
Net sales
Six months ending
August 31, 2024
Fiscal year ending
February 28, 2025

Operating profit

Profit attributable toowners of parent

Ordinary profit

Basic earnings per share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

306,000

4.7

8,200

3.3

9,000

2.1

5,900

1.7

109.30613,000

3.6

17,3002.8

18,8002.0

11,600(1.4)

214.89* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): 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: Yes(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 February 29, 2024
As of February 28, 2023

57,649,868 shares
57,649,868 shares(ii) Number of treasury shares at the end of the period
As of February 29, 2024
As of February 28, 2023

3,669,215 shares
1,668,699 shares(iii) Average number of shares outstanding during the period
Fiscal year ended February 29, 2024
Fiscal year ended February 28, 2023

54,975,638 shares
56,052,540 shares[Reference] Overview of non-consolidated financial results
1. Non-Consolidated financial results for the fiscal year ended February 29, 2024 (from March 1, 2023 to February 29, 2024 )(Percentages indicate year-on-year changes.)(1) Non-Consolidated operating results
Net sales
Fiscal year ended
February 29, 2024
February 28, 2023

Operating profit

Ordinary profit

ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

8,700

(0.7)

2,710

(9.2)

3,082

(18.1)

3,078(18.1)

8,760

6.5

2,984

8.5

3,765

6.8

3,760

29.3

Basic earnings per share
Fiscal year ended
February 29, 2024
February 28, 2023

Diluted earnings per share
Yen

Yen

56.00

-

67.08

-

(2) Non-Consolidated financial position
Total assets
As ofFebruary 29, 2024
February 28, 2023

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

103,101

61,18359.3

1,133.40

100,840

65,01864.5

1,161.40

Reference: Equity
As of February 29, 2024: ¥ 61,183 million
As of February 28, 2023: ¥ 65,018 million

2. Non-Consolidated Financial Forecast for the fiscal year ending February 28, 2025 (March 1, 2024 - February 28, 2025)(Percentages indicate year-on-year changes.)
Net sales
Six months ending
August 31, 2024
Fiscal year ending
February 28, 2025

Operating profit

Ordinary profit

ProfitBasic earnings per share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

Yen

4,667

7.2

1,293

(1.7)

1,530

(2.6)

1,525

(2.8)

28.25

9,330

7.2

2,641

(2.6)

3,195

3.6

3,185

3.4

59.00

* Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.

* Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements, including forecasts of financial results, contained in these materials are based on information currently available to the Company and on
certain assumptions deemed to be reasonable. However, the Company makes no guarantee that these forecasts will be achieved. Actual financial results, etc. may differ
substantially due to various factors.
Please refer to “(4) Future outlook” of “1. Overview of Operating Results and Others” on page 7 of the attached materials for the conditions that form the assumptions for theforecasts of financial results and cautions concerning the use thereof.
(Method of accessing supplementary material on financial results and contents of the financial results briefing)
Supplementary materials for financial results will be posted on the Company's website on Monday, April 15, 2024.
The Company plans to hold a financial results presentation for analysts in the form of a web conference on Tuesday, April 16, 2024. The financial results presentationmaterials to be used on the day of the meeting will be posted on the Company's website on the same day.

Consolidated balance sheet(Millions of yen)
As of February 28, 2023

As of February 29, 2024

AssetsCurrent assets
Cash and deposits

72,662

Accounts receivable - trade

6,232

6,718

Inventories

17,183

18,105

Other

9,715

9,383

Allowance for doubtful accounts

(64)

(103)

105,729

108,890

Total current assets

74,785

Non-current assets
Property, plant and equipment
Buildings and structures

146,353

154,219(101,231)(108,200)

45,12146,018Land

72,301

74,558

Leased assets

10,866

9,120

Accumulated depreciation and impairment(7,331)(5,979)Leased assets, net

3,535

3,140

Accumulated depreciation and impairment
Buildings and structures, net

Construction in progress
Other
Accumulated depreciation and impairment
Other, net

239

25

31,40534,875(25,445)(27,383)

5,959

7,492

127,158

131,234

Goodwill

140

136

Software

7,955

6,374

17

338

Total property, plant and equipment
Intangible assets

Software in progress
Other

335

331

Total intangible assets

8,448

7,181

9,720

11,95747

27

Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit asset

182

1,670

Leasehold and guarantee deposits

11,006

10,819Deferred tax assets

3,270

2,649

Other

603

550

Allowance for doubtful accounts

(12)

(6)

Total investments and other assets

24,81927,667

160,426

166,082

266,155

274,972

Total non-current assets
Total assets

(Millions of yen)
As of February 28, 2023

As of February 29, 2024

Liabilities
Current liabilities
Accounts payable - trade29,922

31,686

Short-term borrowings

7,890

7,592

Lease liabilities

1,149

982

Accounts payable - other

5,815

6,263

Accrued expenses

5,200

5,624

Income taxes payable

3,232

3,416

Accrued consumption taxes

1,048

1,770

Provision for bonuses

2,745

3,043

Provision for point card certificates

530

616

Contract liabilities

3,612

3,954

Other

1,751

1,887

Total current liabilities

62,89966,840Long-term borrowings

14,917

14,394

Lease liabilities

3,576

3,240

Retirement benefit liability

1,975

905

Deferred tax liabilities

372

949

Provision for retirement benefits for directors (and other officers)

1,020

528

Long-term guarantee deposits

4,033

4,229

Asset retirement obligations

5,505

5,912

Other

168

163

31,56930,323

94,46997,163

Share capital

21,205

21,205

Capital surplus

24,99624,996

Retained earnings

129,491

137,984

Treasury shares(3,775)(9,005)

Total shareholders' equity

171,917

175,180

Valuation difference on available-for-sale securities

106

1,894

Remeasurements of defined benefit plans

(337)

734

Total accumulated other comprehensive income

(230)

2,628

Total net assets

171,686

177,809

Total liabilities and net assets

266,155

274,972

Non-current liabilities

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

Consolidated statement of income(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Net sales

566,209591,557

Cost of sales

424,408

442,139

Gross profit

141,800

149,417

The advertising decoration cost

4,457

4,434

a store rental

7,292

7,286

Remuneration for directors (and other officers)

724

662

Salaries and allowances

55,554

57,837

Provision for bonuses

2,735

2,993

Selling, general and administrative expenses

Provision for retirement benefits for directors (and other officers)

65

58

Provision for point card certificates

1,078

1,269

Retirement benefit expenses

1,240

1,092

Utilities expenses

12,44012,160

Taxes and dues

2,951

3,091

Depreciation

8,709

9,724

Amortization of goodwill

93

103

Other

29,621

31,870Total selling, general and administrative expenses

126,965

132,586

Operating profit

14,835

16,831

Interest income

44

38

Dividend income

204

207

Share of profit of entities accounted for using equity method

46

53

Outsourcing service income

763

731

Subsidy income

35

181

Non-operating income

Other

749

634

Total non-operating income

1,843

1,846

Interest expenses

145

143

Provision of allowance for doubtful accounts

15

23

Non-operating expenses

Other

73

71

Total non-operating expenses

234

238

16,444

18,439Ordinary profit

(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Extraordinary income
Gain on sale of non-current assets

148Gain on sale of investment securities

2

7

Subsidy income

55-

Gain on bargain purchase

84-

Gain on reversal of asset retirement obligations-

5

Gain on cancellation of leasehold contracts

2

-

Other

19

0

Total extraordinary income

179

21

34

52

Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on store closings
Impairment losses
Other

6

71

1,043

867

45

21

Total extraordinary losses

1,129

1,012

Profit before income taxes

15,495

17,449

Income taxes - current

5,216

5,523

Income taxes - deferred

334

158

Total income taxes

5,550

5,682

Profit9,944

11,766

(3)

-

9,947

11,766

Loss attributable to non-controlling interests
Profit attributable to owners of parent

Consolidated statement of comprehensive income(Millions of yen)
Fiscal year ended
February 28, 2023
ProfitFiscal year ended
February 29, 2024
9,944

11,766

Valuation difference on available-for-sale securities

(267)

1,787

Remeasurements of defined benefit plans, net of tax

1,855

1,071

(0)

1

Total other comprehensive income

1,588

2,859

Comprehensive income

11,532

14,626

11,535

14,626(3)-

Other comprehensive income

Share of other comprehensive income of entities accounted for using equity
methodComprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Consolidated statement of changes in equity
Fiscal year ended February 28, 2023
(Millions of yen)
Accumulated other comprehensive income

Shareholders' equity

Share capital

Capital surplus

21,20524,996

Balance at
beginning of
periodCumulative effects
of changes inaccounting policies
Restated balance
Dividends ofsurplusProfitattributable toowners of parent
Purchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders'equityTotal changes
during period
Balance at end of
periodTreasury shares

122,622(3,094)

178
21,20524,996

122,801

Total
shareholders'equity165,730

Valuationdifference on
available-forsale securities

Remeasurements ofdefined benefit plans

Total accumulated
othercomprehensive
income373(2,192)(1,819)373(2,192)(1,819)

(267)

1,855

1,588

178
(3,094)

165,908(3,257)(3,257)

9,947

9,947

(0)

(681)

(681)

0

0

-

(0)

6,690

(681)

6,008

(267)

1,855

1,588

21,20524,996

129,491(3,775)

171,917

106

(337)

(230)

Non-controllinginterests
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

Retainedearnings

Total net assets

84

163,995
178

84

164,173(3,257)
9,947
(681)
0

(84)

1,503

(84)

7,512

-

171,686

Consolidated statement of changes in equity
Fiscal year ended February 29, 2024
(Millions of yen)
Accumulated other comprehensive income

Shareholders' equity

Share capital

Capital surplus

21,20524,996

Balance at
beginning of
periodCumulative effects
of changes inaccounting policies
Restated balance
Dividends ofsurplusProfitattributable toowners of parent
Purchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders'equityTotal changes
during period
Balance at end of
periodTreasury shares

129,491(3,775)

21,20524,996

129,491

Total
shareholders'equity171,917

Valuationdifference on
available-forsale securities

Remeasurements ofdefined benefit plans

Total accumulated
othercomprehensive
income

106

(337)

(230)

106

(337)

(230)

1,788

1,071

2,859

(3,775)

171,917(3,273)(3,273)

11,766

11,766(5,229)(5,229)
-

-

-

8,492

(5,229)

3,262

1,788

1,071

2,859

21,20524,996

137,984(9,005)

175,180

1,894

734

2,628

Non-controllinginterests
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

Retainedearnings

Total net assets-

171,686--

171,686(3,273)
11,766(5,229)
-

-

2,859

-

6,122

-

177,809

Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Cash flows from operating activities
Profit before income taxes

15,495

17,449Depreciation

8,729

9,771

Impairment losses

1,043

867

93

103

Amortization of goodwill
Gain on bargain purchase

(84)

-

Interest and dividend income

(248)

(245)

Interest expenses

145

143

Loss (gain) on sale and retirement of non-current assets

20

44

Loss (gain) on sale of investment securities

(2)

(6)

Loss (gain) on valuation of investment securities-

0

Share of loss (profit) of entities accounted for using equity method

(46)

(53)

Increase (decrease) in provision for retirement benefits for directors (andother officers)

(144)

(489)

Increase (decrease) in retirement benefit liability(1,613)(1,488)

Increase (decrease) in provision for bonuses

105

297

Increase (decrease) in allowance for doubtful accounts

15

33

Increase (decrease) in provision for point card certificates(3,448)86

Increase (decrease) in contract liabilities

3,612

326

Decrease (increase) in trade receivables(1,463)(463)

Decrease (increase) in inventories(1,360)(818)

Decrease (increase) in other current assets

(665)

382

Increase (decrease) in trade payables(1,052)

1,573

Increase (decrease) in other current liabilities

777

346

Increase (decrease) in accrued consumption taxes

169

715

Decrease (increase) in guarantee deposits

(7)

14

Other, net

472

286

Subtotal

20,54028,872241

238

Interest and dividends received
Interest paid

(139)

(136)

Income taxes paid

(3,652)(4,921)

Net cash provided by (used in) operating activities

16,98924,052

(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Cash flows from investing activities
Payments into time deposits

(46)

(43)

Proceeds from withdrawal of time deposits

108

56

Purchase of property, plant and equipment(6,934)(9,854)

Proceeds from sale of property, plant and equipment

22

34

Purchase of intangible assets(818)(1,184)

Proceeds from sale of investment securities

120

122

Purchase of investment securities

(0)

(0)

Loan advances

(1)

(3)

Proceeds from collection of loans receivable
Payments of guarantee deposits

11

11

(240)

(154)

Proceeds from refund of guarantee deposits

233

176

Refund of guarantee deposits received

(196)

(92)

Guarantee deposits received

53

330

Proceeds from purchase of shares of subsidiaries resulting in change inscope of consolidation-

16

Payments for acquisition of businesses

(33)

-

Other, net

(47)

(62)

(7,768)(10,647)

(200)

(300)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

9,450

5,000

Repayments of long-term borrowings(6,791)(6,246)

Purchase of treasury shares(682)(5,241)Dividends paid

(3,259)(3,271)(81)-

Repayments to non-controlling shareholders
Other, net(1,237)(1,207)

Net cash provided by (used in) financing activities(2,801)(11,267)

Net increase (decrease) in cash and cash equivalents

6,418

2,137

Cash and cash equivalents at beginning of period

66,17572,594

Cash and cash equivalents at end of period

72,59474,731