Summary of Business Results for the Second Quarter Ended September 30, 2021
[Japan GAAP] (Consolidated)
November 11, 2021
Company
JP-HOLDINGS, INC.
Listed on the TSE 1
Stock Code2749
URL: https://www.jp-holdings.co.jp
Representative
Tohru Sakai, President and Representative Director
Contact
Ryoji Tsutsumi, Director
T E L: +81-52-933-5419
Expected date of filing of quarterly securities report: November 11, 2021
Expected starting date of dividend payment: Preparation of quarterly supplementary financial document: Yes
Quarterly results briefing: Yes (for media members, institutional investors, analysts)（Rounded down to million yen）

1. Consolidated business results for the six months ended September 2021
(April 1, 2021 through September 30, 2021)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Ordinary income

Net income attributable toowners of parent

Million yen% Million yen% Million yen% Million yen%
16,814
3.4
1,095
16.7
1,111
16.3
708
28.6
Six months ended Sept. 2021
16,262
3.3
938
30.3
955
28.4
551
6.8
Six months ended Sept. 2020
(Note) Comprehensive income
Six months ended September 2021: 712 million yen (13.5%)
Six months ended September 2020: 627 million yen (19.2%)
Net income
Diluted net income perper share
share
Yen
Yen
8.11
Six months ended Sept. 2021
6.30
Six months ended Sept. 2020
(Note) In the first quarter of the current fiscal year, the Company changed the presentation of "subsidy income" related to the childcare
business, which was previously included in non-operating income, to "net sales." As a result of this change, major management
indices for the second quarter of the previous fiscal year are based on the indices after this reclassification.

(2) Consolidated financial position
Total assets

Net assets

Million yen
33,051
As of Sept. 30, 2021
29,740
As of Mar. 31, 2021
(Reference) Shareholders’ equity:
As of September 30, 2021: 10,378 million yen
As of March 31, 2021: 10,007 million yen

Million yen
10,37810,007

Shareholders’ equity
ratio
%
31.4
33.7

2. Dividends
End of 1Q

Annual dividend
End of 3Q
Yen
Yen
0.00
0.00
-

End of 2Q
Yen-

Year ended Mar. 31, 2021
Year ending Mar. 31, 2022
Year ending Mar. 31, 2022 (forecast)(Note) Revisions to dividend forecast for the current quarter: None

Year-end

Total

Yen
3.90

Yen
3.90

4.50

4.50

3. Forecast of consolidated business results for the fiscal year ending March 2022
(April 1, 2021 through March 31, 2022)(% change from the previous corresponding period)
Net sales

Net income attributable toowners of parent

Net income
per share

Operating income

Ordinary income

Million yen%

Million yen%

Million yen%

Yen

Year ending Mar. 31, 2022
33,9001.2
2,730(Note 1) Revisions to business forecast for the current quarter: Yes

-4.5

2,760

-6.4

1,760

227.4

20.12

Million yen%

*Notes(1) Changes in significant subsidiaries during the period: None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements:
None(3) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement: Yes: None: None: None(4) Shares outstanding (common stock)①Number of shares outstanding at the end of period (treasury stock included)
As of September 30, 2021
87,849,400 shares
As of March 31, 2021
87,849,400 shares②Treasury stock at the end of period
As of September 30, 2021
380,707 shares
As of March 31, 2021
380,707 shares③Average number of stock during period (quarterly cumulative period)
Six months ended September 2021
87,468,693 shares
Six months ended September 2020
87,468,693 shares*Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing
firms.
*Explanation regarding appropriate use of business forecasts and other special instructions∙ Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the Company deems to be reasonable at the time this report was prepared. Actual results may differ significantly
from the forecasts due to various factors. For information regarding the assumptions that form the basis for the business results
forecasts and notes about using business forecasts, please refer to “1. Qualitative Information on Quarterly Financial Results (3)Consolidated Earnings Forecasts” (Page 3).
∙ The Company plans to hold an online meeting as the financial results briefing for media members, institutional investors andanalysts on Friday, November 19, 2021. The briefing for individual investors on financial results has been cancelled in order toprevent the spread of the COVID-19 infections.

〇 Table of Contents of the Appendix

1. Qualitative Information on Quarterly Financial Results ………………………………………… 2(1) Results of Operations………………………………………………………………………….. 2(2) Financial Position……………………………………………………………………………… 3(3) Consolidated Earnings Forecasts………………………………………………………………………... 4
2. Quarterly Consolidated Financial Statements……………………………………………………. 5(1) Quarterly Consolidated Balance Sheets……………………………………………………….. 5(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income …... 7(3) Notes on Quarterly Consolidated Financial Statements ……………………………………….. 9(Notes on going concern assumption)………………………………………………….……… 9(Notes if there is a significant change in the amount of shareholders' equity)………………………… 9(Changes in accounting policies)………………………………………………………………. 9

1

1. Qualitative Information on Quarterly Financial Results(1) Results of Operations
In the second quarter of the current fiscal year, the Japanese economy was still affected by the outbreak of COVID-19. Economic
activity has continued to be restrained and corporate activities and consumer spending have been weak as the areas covered by theState of Emergency have expanded to 21 prefectures and the period has been extended to the end of September.
However, with the progress of vaccination and the government's policy to normalize the socio-economy by easing various
restrictions , a recovery in the economy is expected.
Meanwhile, in the child-raising support business, the environment surrounding childcare is rapidly changing. In addition to thefurther acceleration of the declining birth rate society due to a recent sharp drop in the birth rate and the expansion of the childcare
support, there is a decrease in the number of children on waiting lists because of people refraining from using the facilities due to
COVID-19, a continuous shortage of childcare workers, an increase in the female employment rate, and changes in working styles
and lifestyles due to the expansion of COVID-19.
In addition, on December 21, 2020, the government announced the “New Child-rearing security Plan”, which aims to reduce thenumber of children on the waiting list. In order to cope with the increase in female employment rate, the government plans toprovide childcare services for approximately 140,000 children over the four-year period from 2021 to the end of 2024.
Furthermore, the role of childcare in society is expected to become increasingly important, as the government has been actively
discussing the establishment of a "Children's Agency", making proposals to increase government spending on childcare policies
and promoting measures to create an environment conducive to child-raising.
Under these severe situations, as measures against COVID-19, our group, in collaboration with local governments, has established
our own response standards and implemented thorough safety measures with giving top priority to ensuring the safety of children,
parents, business partners, and employees. At the same time, we also have been taking prompt measures such as staggered work
hours and remote working at the head office and Tokyo headquarters.
In addition, in order to further improve the quality of child-raising support services and expand the scope of our business, we arecapturing changes in the social environment and have set priority goals of "improve profitability and efficiency," "improvesoundness," and "improve growth potential." By effectively allocating and investing management resources, we have built a solidmanagement foundation. Specifically, with digital transformation (DX) as the pillar of reform to respond to changes in the social
environment, in terms of "improve profitability and efficiency," we will take these initiatives: improve early learning programs toincrease the number of children accepted at existing childcare support facilities as our existing business, developing andintroducing new content, introduction of online learning programs (English, gymnastics, eurhythmics and dance) and online
facility tours, developing online international exchange programs with overseas child care facilities, etc., improve profitability byfurther optimizing staffing, and accelerate operational efficiency by promoting the use of ICT in facilities. In terms of "improvesoundness," as the key of childcare support is "human resources," we have been working to establish a new personnel system,
expand our human resource education and training systems and improve operational efficiency through systemization. As for the"improve growth potential," we introduced a new early learning program "Mojikazu Land" through a business alliance withGAKKEN HOLDINGS CO., LTD., and worked to reduce costs and improve on-site operations through joint purchasing, as well as
to develop services and products that provide added value.
As for the new facility openings, the Group has opened a total of 11 facilities during the second quarter of the fiscal year ending
March 2022 according to the plan, including 3 nursery schools (3 in Tokyo) and 8 school clubs and children's houses (8 in Tokyo).
(Nursery school)
Asc Kami-Shakujii Nursery School(Apr. 1, 2021)

Asc Kanamachi Nursery School(Apr. 1, 2021)

Asc Higashikasai Nursery School(Apr. 1, 2021)(School club/Children's house)
Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 2 (Apr. 1, 2021)
Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 3 (Apr. 1, 2021)
Mitaka City Rokusho School Club A(Apr. 1, 2021)

Niji-iro Kids Club

(Apr. 1, 2021)

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Bancho Elementary School After School No. 1(Apr. 1, 2021)

Bancho Elementary School After School No. 2(Apr. 1, 2021)

Bancho Elementary School After School Kids’Club (Play school)(Apr. 1, 2021)

Jindaiji Children’s House(Apr. 1, 2021)*1: As of April 1, 2021, Tokyo Licensed Nursery Schools named Asc Ontake Nursery School, which had been running since August 1, 2003 and
Asc Shimomaruko Nursery School, which had been running since April 1, 2010, were changed into licensed nursery school.
*2: April 1, 2021, with the opening of the Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 1 above, Wakuwaku
Takinogawa Momiji Hiroba was renamed as Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 1.
*3: As of March 31, 2021, the Company closed Tokyo Licensed Nursery Schools named Asc Iidabashi Nursery School, Asc Nishishinjuku
Nursery School, Asc Ikebukuro Nursery School, Asc Yukigaya-Otsuka Nursery School, and a private school club named AEL
Yokohama Business Park. In addition, due to the expiration of the contract, the Company withdrew from school clubs named Nakanoku Kids Plaza Yato, Kita-ku Sakura Club No. 1, Kita-ku Daini Sakura Club No. 2, and a children's house named Sayama City Chuo
Children's House on March 31, 2021.

As a result, the Group came to have 211 nursery schools, 81 school clubs, 11 children's houses, making a total of 303 facilities
for supporting child-raising at the end of September 2021.
As a result, the Group’s consolidated net sales were 16,814 million yen (up 3.4% year on year), operating income was 1,095
million yen (up 16.7% year on year), ordinary income was 1,111 million yen (up 16.3% year on year), and net income
attributable to owners of parent was 708 million yen (up 28.6% year on year). Both sales and profits increased year-on-year.
The major factors are as follows:
Despite a decrease in the number of children accepted at the beginning of the fiscal year since the State of Emergency was
declared from April 25 to September 30, 2021 to prevent the spread of COVID-19, net sales increased year-on-year reflecting an
increase in the number of children accepted for the full year and the introduction of new facilities. The increase in number ofchildren accepted was attributable to our efforts to create facilities that would be selected by customers, through implementing
online facility tours and online learning programs such as English, gymnastics, eurhythmics and dance, as well as introducing a
new early learning program even under the COVID-19 crisis.
Operating income increased year-on-year. This was attributable to the introduction of new facilities, increase in sales thanks to
the increase in the number of children accepted through above mentioned measures and our efforts to curb expenses and improve
profitability by efficient operation through reallocation of personnel at each facility, review of recruitment activities, andreviewing the ordering system for various supplies and equipment, despite an increase in expenses due to special factors, such as
an increase in accrued bonuses reflecting a change in the eligible period for bonuses due to the introduction of the new personnel
system and an increase in expenses related to the new system introduction.
Ordinary income and net income attributable to owners of parent also increased year-on-year owing to the sharp increase inoperating income supported by the efficient management structure established through above-mentioned measures.
With regard to subsidies, etc. received from local governments for rental company housing for nursery school teachers, theamount was previously recorded as "subsidy income" under non-operating income, but from the first quarter of the current fiscal
year, such subsidies, etc. are now recorded as "net sales." This change in presentation is due to the fact that the qualitative
importance of such subsidies, etc. to the childcare business has increased, and also as a result of confirming and organizing thesubsidy system related to the childcare business as a result of investigating and studying the "Accounting Standard for Revenue
Recognition: we made the judgment that it would be possible to present the actual status of the business more appropriately if therelevant amounts were recorded in the same category as other subsidies. Due to this change in presentation, reclassifications havebeen made for the second quarter of the previous fiscal year.

(2) Financial Position
As for the financial position at the end of the second quarter of the current fiscal year, the total assets amounted to 33,051 million
yen (up 3,310 million yen from the end of the previous fiscal year).
Current assets totaled 19,276 million yen (up 4,137 million yen), mainly reflecting an increase of 4,869 million yen in cash anddeposits, while there were decreases of 518 million yen in accounts receivable, and 123 million yen in inventories.

3

Fixed assets totaled 13,774 million yen (down 826 million yen). This was mainly due to an increase of 40 million yen in deferred
tax assets, while there were decreases of 473 million yen in construction in progress, 183 million yen in buildings and structures,
125 million yen in long-term loans receivable.
Total liabilities amounted to 22,672 million yen (up 2,939 million yen).
Current liabilities totaled 8,138 million yen (up 309 million yen), mainly due to increases of 628 million yen in current portion of
long-term loans payable, 340 million yen in provision for bonuses, and 85 million yen in others. while there were decreases of 408
million yen in accounts payable-other, 195 million yen in income taxes payable, 95 million yen in notes and accounts payabletrade, and 79 million yen in accrued consumption taxes.
Fixed liabilities were 14,533 million yen (up 2,630 million yen). This was mainly due to an increase of 2,703 million yen in longterm loans payable.
Total net assets at the end of the second quarter of the current fiscal year totaled 10,378 million yen (up 371 million yen). This was
mainly due to an increase of 367 million yen in retained earnings.

(3) Consolidated Earnings Forecasts
In light of the business results for the first half of the fiscal year ending March 2022, the Company has upwardly revised its fullyear business forecasts announced in the “Notice Concerning the Revision to Business Forecasts (Upward Revision to Net Sales
and Operating Income) due to Changes in Presentation and Factors behind the Changes between the Results for the First Quarter of
the Fiscal Year ending March 2022 and for the same period of the previous fiscal year due to the Recording of Reserve for
Bonuses” dated August 12, 2021, as follows. For details, please refer to the "Notice Concerning the Upward Revision to Full-year
Business Forecasts" dated November 11, 2021.
In the consolidated business forecasts for the fiscal year ending March 2022, despite a decrease in the number of children acceptedat the beginning of the fiscal year due to the State of Emergency to prevent the spread of COVID-19, we expect net sales to exceed
our initial forecast reflecting an increase in the number of children accepted during the fiscal year. This was attributable to ourefforts to create facilities that would be selected by customers, through implementing online facility tours and online learning
programs such as English, gymnastics, eurhythmics and dance even under the COVID-19 crisis, as well as introducing a new earlylearning program.
Operating income is expected to increase by 18.7% compared to the initial forecast. This was attributable to our efforts to curb
expenses by improving profitability at each facility and reviewing the ordering system for various supplies and equipment, such as
efficient operation through reallocation of personnel at each facility and review of recruitment activities, despite an increase in
expenses due to special factors, such as an increase in accrued bonuses reflecting a change in the eligible period for bonuses due tothe introduction of the new personnel system and an increase in expenses related to the new system introduction.
Ordinary income and net income attributable to owners of parent are also expected to increase by 20.0% and 21.4%, respectively,
compared to the previous forecasts owing to the sharp increase in operating income supported by the efficient management
structure established through above-mentioned measures.
We are actively promoting digitization compared to our competitors. We have developed a variety of online programs ahead of ourcompetitors, such as online facility tours, online learning programs such as English, gymnastics, eurhythmics and dance, online
international exchange programs with overseas child care facilities, etc., and introducing Mojikazu Land, a new early learning
program through a business alliance with GAKKEN HOLDINGS CO., LTD. as an expansion of early learning services.
These efforts are not only for the current fiscal year, but also for the next fiscal year to expand the number of children we accept.
These initiatives have been successful in increasing the number of visitors to our facility tours and in creating facilities that would
be selected by customers in each region. We believe that they will have a significant impact on the expansion of our business in thenext fiscal year and beyond.
The actual results may be different from the forecast according to the changes in business situations, etc. If there are any changes,
the Company will disclose them properly.
Since the timing of the containment of COVID-19 remains uncertain, there is a possibility that it will have a major impact on
consolidated results depending on the spread and containment of the infection and other factors in the future.

42. [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Thousand yen)Previous Fiscal Year
(March 31, 2021)

Previous fiscal year
(September 30, 2021)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

11,020,922
88,25915,890,899
64,936Inventories
Accounts receivable - other167,4813,009,655

43,7952,491,227

858,136-5,057789,738-3,863

15,139,399

19,276,734

12,853,109

12,700,795

Accumulated depreciation and impairment-7,439,556-7,470,326

Buildings and structures, net

5,413,552

5,230,469

Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

Machinery, equipment and vehicles

203

203

Accumulated depreciation

-92

-106

Machinery, equipment and vehicles, net

111

96

998,658

1,061,306

Accumulated depreciation and impairment-770,948-805,296

Tools, furniture and fixtures, net

Tools, furniture and fixtures

227,710

256,010Land
Construction in progress

585,678
474,178585,678
1,100

Total tangible fixed assets

6,701,231

6,073,355

167,122

151,929

Intangible assets
Goodwill
Other

47,30740,756

Total intangible assets

214,430

192,686

Investment securities
Long-term loans receivable

382,394
3,170,376

370,771
3,045,132

Guarantee deposits
Deferred tax assets

1,906,868
1,631,311

1,880,787
1,671,565

Other
Allowance for doubtful accounts

603,466-8,871

546,392-6,180Total investments and other assets

7,685,546

7,508,468

14,601,208

13,774,509

29,740,607

33,051,244

Investments and other assets

Total fixed assets
Total assets5

(Thousand yen)Previous Fiscal Year
(March 31, 2021)

Current fiscal year
(September 30, 2021)

Liabilities
Current liabilities
Notes and accounts payable-trade
Current portion of long-term loans payable219,266
3,307,412

123,6123,936,300

Accounts payable – other
Income taxes payable

1,634,568
551,678

1,226,492
356,404

Accrued consumption taxes
Reserve for bonuses

160,836
544,474

81,439884,700

Asset retirement obligation
Other

51,9001,359,619

84,5481,445,272

Total current liabilities

7,829,755

8,138,769

Long-term debt
Retirement benefit liability

10,305,896
839,667

13,009,422
869,964

Asset retirement obligation
Other

747,503
10,012645,666
8,513

Fixed liabilities

Total fixed liabilities

11,903,079

14,533,566

19,732,834

22,672,336

Shareholders’ equity
Capital1,603,955

1,603,955

Capital surplus
Retained earnings

1,449,544
7,178,942

1,449,544
7,546,757

Total liabilities
Net assets

Treasury stock-107,515-107,515

10,124,926

10,492,741

Accumulated other comprehensive income
Valuation difference on available-for- salesecurities
Deferred gains or losses on ledges-84,960-93,078-6,948-5,908Remeasurements of defined benefit plans-25,245-14,847

Total shareholders’ equity

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

6-117,154-113,833

10,007,772

10,378,907

29,740,607

33,051,244

(2) [Quarterly Consolidated Statements of Income and Statements of Comprehensive Income][Quarterly Consolidated Statement of Income][Second Quarter of FY3/22]

Net sales
Cost of sales

Previous Second Quarter(Apr. 1, 2020
- September 30, 2020)
16,262,270
13,824,713(Thousand yen)
Current Second Quarter(Apr. 1, 2021
- September 30, 2021)
16,814,993
14,149,058

Gross profit

2,437,556

2,665,935

Selling, general and administrative expenses

1,498,699

1,570,399

Operating income

938,857

1,095,535

Non-operating income
Interest income

42,774

39,121

Other

6,110

10,094

Total non-operating income

48,88549,215Interest expenses
Other

28,2603,997

30,497
2,674

Total non-operating expenses

32,25733,172

955,485

1,111,579

Gain on sales of fixed assets

1,606

-

Extraordinary income

1,606

-

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss
Loss (gain) on retirement of fixed assets

035

Loss on sales of investment securities
Impairment loss (on facilities)

115,907

3,052-

Total extraordinary loss

115,907

3,087

Income before income taxes and others

841,184

1,108,492

Corporate, inhabitant and enterprise taxes

319,478

442,135

Income taxes-deferred-29,593-42,585

Total income tax

289,884

399,549

Net income

551,299

708,942

Net income attributable to owners of parent

551,299

708,9427

[Quarterly Consolidated Statement of Comprehensive Income][Second Quarter of FY3/22]
Previous Second Quarter(Apr. 1, 2020
- September 30, 2020)
551,299(Thousand yen)
Current Second Quarter(Apr. 1, 2021
- September 30, 2021)
708,942

Valuation difference on available-for- sale securities
Deferred gains or losses on ledges

64,146-2,650-8,1171,040

Foreign currency translation adjustments
Remeasurements of defined benefit plans-1,772
16,316

10,398

Total other comprehensive income

76,0393,320

627,339712,263

627,339712,263

Net income
Total accumulated other comprehensive income

Comprehensive income
BreakdownComprehensive income attributable to owners of parent

8

(3) Notes on Quarterly Consolidated Financial Statements(Notes on going concern assumptions)
Second quarter of FY3/22 (April 1, 2021 – September 30, 2021)
Not applicable(Notes if there is a significant change in the amount of shareholders' equity)
Second quarter of FY3/22 (April 1, 2021 – September 30, 2021)
Not applicable(Changes in accounting policies)(Application of the accounting standard for revenue recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc.
effective from the beginning of the first quarter of the current fiscal year and it recognizes revenue when it satisfies a
performance obligation by transferring promised goods or services (an asset) to a customer. An asset is transferred when thecustomer obtains control of that asset. It recognizes as revenue the amount expected to be received upon exchange of goods orservices.
The application of this standard has no effect on the quarterly consolidated financial statements for the current second quarter,
the second quarter of the previous fiscal year and the previous fiscal year.
(Application of accounting standard for fair value measurement, etc.)
The Company has applied the Accounting Standard for Fair Value Measurement, etc.” (ASBJ Statement No. 30, July 4, 2019)from the beginning of the first quarter of the current fiscal year, and it has applied the accounting policies stipulated in the“Accounting Standard for Fair Value Measurement, etc.” prospectively in accordance with the transitional treatment provided in
Paragraph 19 of the “Accounting Standard for Fair Value Measurement” and paragraph 44-2 of the “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10 of July 4, 2019). The application of this standard has no effect on the quarterly
consolidated financial statement.

9