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July 4, 2024

Consolidated Financial Results
for the Three Months Ended May 31, 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, Chairman,CEOInquiries:
Furukawa Koichi, Vice Chairman,CFO
Telephone:+81-11-530-1000
Scheduled date to file quarterly securities report:
July 16, 2024
Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
None(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended May 31, 2024 (from March 1, 2024 to May 31, 2024 )(Percentages indicate year-on-year changes.)(1) Consolidated operating results (cumulative)
Net sales
Three months ended
May 31, 2024
May 31, 2023

Operating profit

Profit attributable to owners ofparent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

148,824

4.1

3,870

(2.8)

4,264(4.3)

2,664(11.4)

142,900

3.3

3,982

3.5

4,455

5.8

3,008

4.7

Note: Comprehensive income For the three months ended May 31, 2024: ¥ 2,831 million
For the three months ended May 31, 2023: ¥ 3,528 million
Basic earnings per share
Three months endedMay 31, 2024
May 31, 2023

[ (19.8) % ][ 113.8 % ]Diluted earnings per share
Yen

Yen

49.35

-

53.81

-(2) Consolidated financial position
Total assets
As ofMay 31, 2024
February 29, 2024

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen%

278,133

178,535

64.2

274,972

177,809

64.7

Reference: Equity
As of May 31, 2024 : ¥ 178,535 million
As of February 29, 2024: ¥ 177,809 million

2. Cash dividends
First quarter-end
Fiscal year ended
February 29, 2024
Fiscal year ending
February 28, 2025
Fiscal year ending
February 28, 2025
(Forecast)

Annual dividends per share
Third quarter-end

Second quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen-29.00-39.00

68.00

34.00

68.00

34.00

Note: Revisions to the forecast of cash dividends most recently announced: None

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 profitBasic 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)

214.89Note: Revisions to the earnings forecasts most recently announced: None

* Notes

Profit attributable toowners of parent

Ordinary profit

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: YesFor details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes (4) Notes to Quarterly Consolidated Financial Statements (Application of Special
Accounting Methods for Preparation of Quarterly Consolidated Financial Statements)" on page 10 of the attached document.

(3) 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
(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of May 31, 2024
As of February 29, 2024

57,649,868 shares
57,649,868 shares(ii) Number of treasury shares at the end of the period
As of May 31, 2024
As of February 29, 2024

3,669,249 shares
3,669,215 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Three months ended May 31, 2024
Three months ended May 31, 2023

53,980,624 shares
55,905,575 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements in this document are based on information currently available to the Company and certain assumptions that the Company considers
reasonable, and are not intended to be a promise by the Company that they will be achieved. Actual financial results, etc. may differ substantially due to various factors.
Please refer to "1. Qualitative Information on Financial Results for this quarter (3) Explanation of Forward-Looking Statements, including Consolidated Earnings Forecasts"
on page 4 of the attached materials for the assumptions used for earnings forecasts and precautions regarding the use of earnings forecasts.
(Method of accessing supplementary material on quarterly financial results)
Supplementary materials for quarterly financial results will be posted on the Company's website on Thursday, July 4, 2024.

Quarterly consolidated balance sheet(Millions of yen)
As of February 29, 2024

As of May 31, 2024

AssetsCurrent assets
Cash and deposits

74,785

Accounts receivable - trade

6,718

7,684

Inventories

18,105

19,310Accounts receivable - other

5,596

3,634

Other

3,786

3,549

Allowance for doubtful accounts
Total current assets

78,029

(103)

(102)

108,890

112,104

46,01845,658Non-current assets
Property, plant and equipment
Buildings and structures, net
Tools, furniture and fixtures, net

7,138

7,377

Land

74,55874,605

Leased assets, net

3,140

3,063

Other, net

378

424

131,234

131,129

Total property, plant and equipment
Intangible assets
Goodwill

136

108

Software

6,374

6,298

Software in progress

338

64

Other

331

329

Total intangible assets

7,181

6,801

Investment securities

11,957

12,154

Leasehold and guarantee deposits

10,81911,030Retirement benefit asset

1,670

1,803

Deferred tax assets

2,649

2,564

Other

578

553

Allowance for doubtful accounts

(6)

(6)

Investments and other assets

Total investments and other assets
Total non-current assets
Total assets

27,66728,098166,082

166,029

274,972

278,133

(Millions of yen)
As of February 29, 2024

As of May 31, 2024

Liabilities
Current liabilities
Accounts payable - trade

31,686

34,617

Short-term borrowings

7,592

7,504

Lease liabilities

982

950

Accounts payable - other

6,263

5,509

Accrued expenses

5,624

6,602

Income taxes payable

3,416

1,845

Accrued consumption taxes

1,770

1,761

Provision for bonuses

3,043

3,789

Provision for point card certificates

616

588

Contract liabilities

3,954

3,624

Other

1,887

2,247

Total current liabilities

66,84069,043Long-term borrowings

14,394

14,957

Lease liabilities

3,240

3,153

Retirement benefit liability

905

741

Non-current liabilities

Provision for retirement benefits for directors (and other officers)

528

519

Long-term guarantee deposits

4,229

4,195

Asset retirement obligations

5,912

5,913

Other

1,112

1,073

Total non-current liabilities

30,32330,555

97,16399,59821,205

21,205

Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus

24,99624,996

Retained earnings

137,984

138,542

Treasury shares(9,005)(9,005)

Total shareholders' equity

175,180

175,738

Valuation difference on available-for-sale securities

1,894

2,039

Remeasurements of defined benefit plans

734

756

Total accumulated other comprehensive income

Accumulated other comprehensive income

2,628

2,796

Total net assets

177,809

178,535

Total liabilities and net assets

274,972

278,133

Quarterly consolidated statement of income(Millions of yen)Three months ended
May 31, 2023

Three months ended
May 31, 2024

Net sales

142,900

148,824

Cost of sales

106,718

111,509

Gross profit

36,181

37,314

The advertising decoration cost

1,076

1,077

a store rental

1,823

1,810

Provision for point card certificates

320

395

Selling, general and administrative expenses

Remuneration for directors (and other officers)

180

166

Salaries and allowances

13,18913,887

Provision for bonuses

1,695

1,813

Provision for retirement benefits for directors (and other officers)

18

14Retirement benefit expenses

279

246

Utilities expenses

3,161

2,893

Taxes and dues

755

785

Depreciation

2,350

2,434

Amortization of goodwill

2328

Other7,325

7,891

Total selling, general and administrative expenses

32,19933,444

Operating profit

3,982

3,870

Interest income

88Dividend income

3754

Share of profit of entities accounted for using equity method

1417

Outsourcing service income

188

179

Subsidy income

108

24

Other

170

161

Total non-operating income

528

444

Interest expenses

3637

Other

18

13

Non-operating income

Non-operating expenses

Total non-operating expenses

54

50

4,455

4,264

20

Compensation income-19

Gain on reversal of asset retirement obligations

5-Total extraordinary income

719

Ordinary profit
Extraordinary income
Gain on sale of non-current assets

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

47

Loss on tax purpose reduction entry of non-current assets-20

Loss on store closings

50

Extraordinary loss on office-9

Other00

Total extraordinary losses

1038

Profit before income taxes

4,453

4,245

Income taxes

1,444

1,581

Profit

3,008

2,664

Profit attributable to owners of parent

3,008

2,664

Quarterly consolidated statement of comprehensive income(Millions of yen)Three months ended
May 31, 2023
ProfitThree months ended
May 31, 20243,008

2,664

Valuation difference on available-for-sale securities

489

145

Remeasurements of defined benefit plans, net of tax

30

22

Share of other comprehensive income of entities accounted for using equity
method0(0)Total other comprehensive income

520

167

Comprehensive income

3,528

2,831

3,528

2,831

--

Other comprehensive income

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Quarterly consolidated statement of cash flows(Millions of yen)Three months ended
May 31, 2023

Three months ended
May 31, 2024

Cash flows from operating activities
Profit before income taxes

4,453

4,245

Depreciation

2,361

2,444

Interest and dividend income

(46)

(62)

Interest expenses

3637

Increase (decrease) in provision for bonuses

745

746

Increase (decrease) in provision for point card certificates

49(27)

Increase (decrease) in contract liabilities

7(329)

Decrease (increase) in trade receivables

(620)

(965)

Decrease (increase) in inventories(762)(1,204)

Increase (decrease) in trade payables

3,873

2,931

Increase (decrease) in accrued consumption taxes

723

(8)

Other, net

499

2,483

Subtotal

11,321

10,289Interest and dividends received

60

78Interest paid

(34)

(32)

Income taxes paid

(2,712)(2,808)Net cash provided by (used in) operating activities

8,634

7,526

(3,200)(2,026)140

Purchase of intangible assets

(263)

(329)

Payments of guarantee deposits

(33)

(113)

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

Proceeds from refund of guarantee deposits

6868Refund of guarantee deposits received

(18)

(31)

Guarantee deposits received

161

9

Payments into time deposits

(46)

(43)

Proceeds from withdrawal of time deposits

46

43

Other, net
Net cash provided by (used in) investing activities

(32)

(8)

(3,305)(2,431)

(500)

(250)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings-2,000

Repayments of long-term borrowings(1,286)(1,274)Purchase of treasury shares

(687)

(0)

Dividends paid

(1,623)(2,066)

Other, net

(404)

(259)

Net cash provided by (used in) financing activities(4,502)(1,851)

Net increase (decrease) in cash and cash equivalents

826

3,243

Cash and cash equivalents at beginning of period

72,59474,731

Cash and cash equivalents at end of period

73,42077,975