Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Nine Months Ended November 30, 2023
(Based on Japanese GAAP)
January 9, 2024
Company name:
ARCS COMPANY,LIMITED
Stock exchange listing: Tokyo, Sapporo
Stock code:
Representative:

9948
President

URL

https://www.arcs-g.co.jp/Kiyoshi Yokoyama

Inquiries:
Director,Executive Vice President
Scheduled date to file Quarterly Securities Report:

Koichi Furukawa
January 15, 2024

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:

NoTEL

011-530-1000(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the nine months ended November 30, 2023 (from March 1, 2023 to November 30, 2023)(1) Consolidated operating results (cumulative)
Net sales
Nine months ended November 30, 2023
Nine months ended November 30, 2022

Millions of yen
436,410
418,780

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
4.2
11,094
7.9
12,341
7.1
7,907
1.8
–
10,277–
11,526
(7.4)
7,766
(3.6)

Earnings per share

Diluted earnings per share

Yen
143.03138.49Nine months ended November 30, 2023
Nine months ended November 30, 2022

Yen––(2) Consolidated financial position
Total assets
As of November 30, 2023As of February 28, 2023

Net assets

Millions of yen
270,569
266,155

Equity ratio

Millions of yen
173,855
171,686

%
64.3
64.5

2. Cash dividends
Annual dividends per share

Year ended February 28, 2023
Year ending February 29, 2024

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
28.00
29.00

Yen––

Yen
30.00

Yen
58.00

29.00

58.00

Year ending February 29, 2024 (Forecast)Total

3. Forecast of consolidated financial results for the year ending February 29, 2024 (from March 1, 2023 to February 29, 2024)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
582,000
2.8
14,800(0.2)
16,200
(1.5)
9,950
0.0
177.7414. Notes(1) Changes in significant subsidiaries during the nine months ended November 30, 2023
(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

Yes
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of November 30, 2023

57,649,868 shares As of February 28, 2023

57,649,868 shares

Number of treasury shares at the end of the period
As of November 30, 2023

3,333,084 shares As of February 28, 2023

1,668,699 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended November 30, 2023

55,286,821 shares Nine months ended November 30, 2022

256,075,885 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of February 28, 2023

As of November 30, 2023

AssetsCurrent assets
Cash and depositsAccounts receivable - trade

72,662
6,232

68,937
7,301

Inventories
Accounts receivable - other

17,183
5,971

19,935
4,583

Other
Allowance for doubtful accounts

3,743
(64)

4,334
(107)

105,729

104,986

Buildings and structures, net
Land45,121
72,30145,78074,439Leased assets, net
Other, net

3,535
6,199

3,344
7,392

127,158

130,956

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

Total property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress
Other

140

143

7,955
17

6,759
250

335

332

8,448

7,486

Investment securities
Leasehold and guarantee deposits

9,720
11,006

11,894
11,078Deferred tax assets
Other

3,270
833

3,216
956

Total intangible assets
Investments and other assets

Allowance for doubtful accounts

(12)

(6)

Total investments and other assets

24,81927,139160,426

165,582

266,155

270,569

Total non-current assets
Total assets3

(Millions of yen)
As of February 28, 2023

As of November 30, 2023

Liabilities
Current liabilities
Accounts payable - trade29,922

34,290

Short-term borrowings
Lease liabilities

7,890
1,1496,212
1,044

Accounts payable - otherAccrued expenses

5,815
5,200

5,804
6,608

Income taxes payable
Accrued consumption taxes

3,232
1,048

2,136
1,259

Provision for bonuses
Provision for point card certificates

2,745
530

1,371
707

Contract liabilities
Other

3,612
1,751

4,791
2,483

Total current liabilities

62,89966,710Non-current liabilities
Long-term borrowings

14,917

13,700

Lease liabilities
Retirement benefit liability

3,576
1,975

3,352
1,270

Provision for retirement benefits for directors (and otherofficers)

1,020

514

Long-term guarantee deposits
Asset retirement obligations

4,033
5,505

4,250
5,895

Other

540

1,018

31,56930,002

94,46996,713

Share capital
Capital surplus

21,20524,996

21,20524,996

Retained earnings
Treasury shares

129,491(3,775)

134,125(8,074)

Total shareholders' equity

171,917

172,252

106

1,835

(337)

(231)

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

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

4(230)

1,603

171,686

173,855

266,155

270,569

Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)
Nine months ended

Nine months ended

November 30, 2022

November 30, 2023

Net sales
Cost of sales

418,780
314,697

436,410327,141

Gross profit

104,083

109,269

Selling, general and administrative expenses
The advertising decoration cost3,3153,323

A store rental
Provision for point card certificates

5,432
790

5,475
944

Remuneration for directors (and other officers)
Salaries and allowances

544
41,758502
43,476

Provision for bonuses
Provision for retirement benefits for directors (and other

1,959

1,850

49

44

932

828

Utilities expenses
Taxes and dues

8,639
2,263

8,982
2,326

Depreciation
Amortization of goodwill

6,537
70

7,165
74

Other

21,512

23,181

Total selling, general and administrative expenses

93,80598,175

10,277

11,094

officers)
Retirement benefit expenses

Operating profit
Non-operating income
Interest income

3025

Dividend income
Share of profit of entities accounted for using equity method

148
52

151
46

Outsourcing service income
Other

577
608

553
629

Total non-operating income

1,417

1,406

Non-operating expenses
Interest expenses

109

108

Other

59

50

Total non-operating expenses

168

158

11,526

12,341Gain on sale of non-current assets
Gain on sale of investment securities

32
2

87

Subsidy income
Gain on reversal of asset retirement obligations

55––5

Gain on bargain purchase
Other

84
5–
0

Total extraordinary income

181

21

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sale and retirement of non-current assets

48

38

Loss on store closings
Other014102

Total extraordinary losses

6351

5

(Millions of yen)
Nine months ended

Nine months ended

November 30, 2022

November 30, 2023

Profit before income taxes

11,644

12,311

Income taxes

3,881

4,403

Profit

7,762

7,907

(3)

–

7,766

7,907

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

6

Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income

Nine months ended

Nine months ended

November 30, 2022

November 30, 2023

7,762

7,907

(683)
(167)

1,728
105

(0)

0(851)

1,834

6,911

9,742

6,914

9,742

(3)

–

Comprehensive income attributable toComprehensive income attributable to owners of parentComprehensive income attributable to non-controllinginterests

7

Consolidated statements of cash flows(Millions of yen)
Nine months ended

Nine months ended

November 30, 2022

November 30, 2023

Cash flows from operating activities
Profit before income taxes

11,644

12,311

Depreciation
Interest and dividend income

6,548
(178)

7,199
(177)

Interest expenses
Increase (decrease) in provision for bonuses

109(1,110)108(1,373)

Increase (decrease) in provision for point card certificates
Increase (decrease) in contract liabilities(3,381)
4,309

177
1,162

Decrease (increase) in trade receivables
Decrease (increase) in inventories(2,154)(2,896)(1,046)(2,649)

Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes

1,949
13

4,175
203

Other, net

1,072

1,451

Subtotal

15,925

21,544178

179

Interest paid
Income taxes paid

(105)
(4,699)(104)(5,373)

Net cash provided by (used in) operating activities

11,29916,247(5,488)(7,395)

Proceeds from sale of property, plant and equipment
Purchase of intangible assets

41(612)46(852)

Payments of guarantee deposits
Proceeds from refund of guarantee deposits

(233)
181

(128)
127

Refund of guarantee deposits received
Guarantee deposits received

(129)
36

(62)
304

Payments into time deposits
Proceeds from withdrawal of time deposits

(46)
108

(43)
46

Interest and dividends received

Cash flows from investing activities
Purchase of property, plant and equipment

Other, net

35

92(6,106)(7,864)

Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

(900)
6,200

150
1,000

Repayments of long-term borrowings
Purchase of treasury shares(5,524)(682)(4,770)(4,308)Dividends paid
Repayments to non-controlling shareholders(3,221)(81)(3,245)–

Net cash provided by (used in) investing activities
Cash flows from financing activities

Other, net
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents

(931)

(929)

(5,140)(12,103)52(3,721)

Cash and cash equivalents at beginning of period

66,17572,594

Cash and cash equivalents at end of period

66,227

68,8738