Consolidated Financial Results for the 2 Q of the Fiscal Year Ending December 2022
[Japanese GAAP]
August 12, 2022
Listed Exchange Tokyo

Listed company name
Code number

Frontier Management Inc.
7038
URL https://www.frontier-mgmt.com/
Representative Director,
Representative(Title)Shoichiro Onishi
Co-President & Executive Officer
Executive Officer,
Contact person(Title) Head of Company Planning and
Hiroaki Hamada
Administration Department
Scheduled date of
Scheduled date to file Quarterly
August 12, 2022
commencement of dividend
Securities Report
payment
Preparation of supplementary material onquarterly financial results: Yes
Quarterly results briefing: Yes(for institutional investors and analysts)

TEL 03-6862-8335-(Millions of yen are rounded down)
1. Quarterly consolidated results for FY2022 2Q (January 1, 2022-June 30, 2022)(1)Consolidated Operating Results (Cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating income

Net income attributable toowners of parent
JPY mil.
%Ordinary income

JPY mil.

%

JPY mil.

%

JPY mil.

%

FY2022 2Q

3,972

53.8

543

632.6

556

581.7

277

444.4

FY2021 2Q

2,582

12.0

74

△37.6

81

△35.3

51

△37.6

(NOTE)
Comprehensive income

FY2022 2Q

283

JPY
mil.

(475.7%)JPY

Fully diluted
Net income per shareJPY

FY2022 2Q

24.32

23.89

FY2021 2Q

4.46

4.40

Net income per share

FY2021 2Q

49

JPY
mil.

(△40.4%)(2)Consolidated Financial Position
Total assets

Net assets

Equity ratio

JPY mil.

JPY mil.

%

FY2022 2Q

5,436

2,734

48.5

End of FY2021

3,819

2,454

63.0

Reference:
Shareholders' equity

FY2022 2Q

2,638

JPY mil.

End of FY2021

2,407

JPY mil.

2. Dividend Status
Dividend per share
End of First quarterEnd of second quarterEnd of the third quarter

JPY

JPY

JPY

JPY

JPY

FY2021

-

0.00

-

10.00

10.00

FY2022

-

0.00
-

-

-

FY2022 (Forecast)

Term end

Total(NOTE)1. Revisions to the most recently announced dividend forecasts: None
2.We plan to pay a dividend for the fiscal year ending December 31, 2022, but we have not yet decided on the expected amount of dividends.

3. Forecasts for FY2022 (January 1, 2022-December 31, 2022)(Percentages indicate previous fiscal year changes.)
Net sales

Full year

Operating income

Ordinary income

Net income attributable toowners of parent

Net income
Per share

JPY mil.

%

JPY mil.

%

JPY mil.

%

JPY mil.

%

Yen

7,000

21.9

800

59.6

800

55.5

500

47.6

43.88

(NOTE)Revisions to the most recently announced earnings forecasts: None-1-※ Notes(1)Changes in significant subsidiaries during the quarter under review (changes in specified subsidiaries accompanied by changes inthe scope of consolidation): Yes
Newly consolidated: 2 companies (company name: Celebrain Corporation and Frontier Capital Inc.)(2)Adoption of special accounting methods for preparing quarterly consolidated financial statements: None
(3)Changes in accounting policies and changes or restatement of accounting estimates① Changes in accounting policies due to revisions to accounting standards, etc.: Yes② Changes in accounting policies other than ①: None
③ Changes in accounting estimates: None
④ Restatement of revisions: None
(4)Number of shares of common stock outstanding① Number of shares issued at the end of theperiod (including treasury stock)

FY2022 2Q

11,458,998 Shares

FY2021

11,418,398 Shares② Number of treasury stock at the end of theperiodFY2022 2Q

5,821 Shares

FY202125,819 Shares③ Average number of shares during the period(quarterly consolidated cumulative period)

FY2022 2Q

11,420,326 Shares

FY2021 2Q

11,418,641 Shares※ Quarterly financial results are not subject to quarterly review by certified public accountants or auditing firms.
※ Explanations and other special notes concerning the appropriate use of business performance forecasts(Cautionary Statement with Respect to Forward-Looking Statements)
The earnings forecasts and other forward-looking statements herein are based on information currently available to us andcertain assumptions that we believe to be reasonable, and are not intended to guarantee the achievement of the forecasts.
Actual results may differ materially from the forecast depending on a range of factors. Please refer to "1. Qualitative Information
on Quarterly Financial Results, (3) Explanation of Consolidated Financial Forecasts and Other Forward-Looking Information" onpage 3 of the attached material for the assumptions underlying the forecasts and notes on the use of the forecasts.

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○Accompanying Materials – Contents
1.Overview of Quarterly Financial Results .................................................................................................................................
(1) Management's discussion ...................................................................................................................................................

2(2) Explanation of Financial Position ......................................................................................................................................

3(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements ..............................................

3

2. Quarterly Consolidated Financial Statements ..........................................................................................................................

4(1) Quarterly Consolidated Balance Sheets .............................................................................................................................

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income .......

62

Consolidated income statement for the quarter
2nd Quarter Consolidated Cumulative Period ........................................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income
2nd quarter Consolidated Cumulative Period ........................................................................................................

7(3) Quarterly Consolidated Statements of Cash Flows ...........................................................................................................

8(4) Notes to Quarterly Consolidated Financial Statements .....................................................................................................

9(Notes on Going Concern) ..............................................................................................................................................

9(Notes in the Event of Significant Changes in Shareholders' Equity) ............................................................................

9(Changes in Accounting Policies.) ..................................................................................................................................

9(Additional Information) .................................................................................................................................................

9(Segment Information) ....................................................................................................................................................

10

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1.Overview of Quarterly Financial Results(1) Operating Results
During the 2Q of the current fiscal year (from January 1, 2022 to June 30, 2022), Japanese economy saw some signs of
economic recovery as action regulations were relaxed in line with the spread of the infectious diseases of the new Corona
Virus. However, downside risks to the economy remain largely uncertain, such as resource supply constraints and soaring
energy prices due to the prolonged situation in Russia and the Ukraine, the impact of the slowdown in growth due to China's
zero corona policy, and rising prices due to the rapid depreciation of the yen.
Under this business environment, our Group will continue to focus on proposals and execution to resolve corporate issues on
a one-stop basis by providing comprehensive services utilizing management consulting, M&A advisory, revitalization support,
and other functions. At the same time, we will establish Frontier Capital Inc. on April 1, 2022, and commence an investment
business involving the dispatch of management personnel as a new business.
As a result of the above, our Group's financial results for the second quarter of the current fiscal year were net sales of
JPY3,972,843k (up 53.8% from the same quarter of the previous fiscal year), operating income of JPY543,416k (up 632.6%),
ordinary income of JPY556,776k (up 581.7%), and profit attributable to owners of parent of JPY277,805k (up 444.4%).
Operating results by segment are as follows.
Our Group's business has been a single segment, but from the second quarter of the current fiscal year, we have changed totwo segments: the Consulting Advisory Business and the Investment Business. As a result, no comparisons and analyses are
made with the same quarter of the previous year except for net sales and operating income in the Consulting Advisory Businessand net sales by business.
(Consulting & Advisory Business Segment)
In the Consulting & Advisory Business Segment, the results for the second quarter of the current fiscal year were as follows.
The Management Consulting Business and the M&A Advisory Business remained strong. As a result, net sales were
JPY3,972,843k (up 53.8%) and operating income was JPY567,600k (up 665.2%).
Operating results by business are as follows.
< Management Consulting Business >In the management consulting business, net sales for the second quarter under review were JPY2,188,399k (up 61.2%). In
the second quarter of the fiscal year under review, in addition to the effects of increased personnel through active recruitment,
the enhancement and expansion of consulting services, including those related to SR/IR, DX, and personnel affairs, contributed
to a significant increase in sales compared with the same period of the previous fiscal year.
<M&A advisory business>
The M&A advisory business posted net sales of JPY1,536,734k for the second quarter of the current fiscal year (up 90.5%).
As a result of the conclusion of several large-scale projects in the consolidated cumulative second quarter under review,
revenues increased significantly compared with the same period of the previous fiscal year.
< Revitalization Support Business >In the Revitalization Support Business, net sales for the second quarter under review were JPY165,918k (down 56.2%). Dueto the continuation of financial institutions' stance on lending support to companies, the need for revitalization support has not
expanded, and net sales declined compared with the same quarter of the previous fiscal year.
< Other Business >In other businesses, net sales for the second quarter under review were JPY81,792k (up 108.5%).
(Investment Business Segment)
The Investment Business Segment posted an operating loss of JPY24,183k for the second quarter of the current fiscal year,
reflecting various expenses, including personnel expenses, associated with the start-up of this business.

-4-(2) Financial Position<Assets>
The Group's assets at the end of the second quarter of the current fiscal year were JPY5,436,027k (compared with
JPY3,819,274k at the end of the previous fiscal year), an increase of JPY1,616,753k from the end of the previous fiscal year.
This was mainly due to increases of JPY1,761,010k in cash and deposits and JPY289,806k in goodwill, and decreases of
JPY337,303k in notes and accounts receivable-trade and contract assets and JPY45,148k in deferred tax assets.
<Liabilities>
The Group's balance of liabilities at the end of the second quarter of the current fiscal year was JPY2,701,739k (comparedwith JPY1,365,207k at the end of the previous fiscal year), an increase of JPY1,336,531k from the end of the previous fiscal
year.
This was mainly due to an increase of JPY847,486k in long-term debt (including current portion of long-term debt) and
JPY500,000k in short-term debt.
<Net assets>
The balance of net assets of the Group at the end of the second quarter of the current fiscal year was JPY2,734,288k(compared to JPY2,454,066k at the end of the previous fiscal year), an increase of JPY280,221k from the end of the previous
fiscal year.
This was mainly due to the recording of profit attributable to owners of parent of JPY277,805kin the second quarter of thecurrent fiscal year.
<Cash Flows>
Cash and cash equivalents at the end of the second quarter of the current fiscal year increased by JPY1,761,010k from theend of the previous fiscal year to JPY3,545,228k.
The status of each cash flow and its factors in the second quarter of the current fiscal year are as follows.
Cash flows from operating activities
Net cash provided by operating activities was JPY782,690k (net cash used of JPY318,645k in the same quarter of theprevious fiscal year). This was mainly due to an increase of JPY503,270k in profit before income taxes, a decrease of
JPY393,502k in notes and accounts receivable-trade, and a decrease of JPY83,636k in stock-based compensation expenses,
and a decrease of JPY106,229k in provision for bonuses and JPY228,691k in income taxes paid.
Cash flows from investing activities
Net cash used in investing activities was JPY246,860k (net cash used of JPY5,824k in the same quarter of the previous fiscal
year). This was mainly due to purchase of shares of subsidiaries resulting in change in scope of consolidation amounting to
JPY238,932k.
Cash flows from financing avtivities
Net cash provided by financing activities amounted to JPY1,215,363k (net cash provided by financing activities was
JPY94,165k in the first quarter of the previous fiscal year). This was mainly due to a net increase in short-term loans payableof JPY500,000k, proceeds from long-term loans payable of JPY860,000k, and a decrease in dividends paid of JPY125,096k.
(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements
There is no change in the full-year consolidated earnings forecast from the consolidated earnings forecast announced on
February 10, 2022.

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2.Quarterly Consolidated Financial Statements(1) Balance Sheets(Thousands of yen)
The Previous fiscal year
(As of Dec 31, 2021)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Notes, accounts receivable and contract assets
Operational investment securities
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible assets
Buildings, net
Tools, furniture and fixtures, net
Net property, plant and equipment
Intangible fixed assets
Software
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Investments in affiliates
Lease deposits
Deferred tax assets
Other
Total investments and other assets
Total fixed assets
Deferred assets
Business commencement expense/
Total deferred assets
Total assets-6-

The 2Q of current fiscal year
(As of Jun 30, 2022)

1,784,218
1,073,376
9,837
147,710△16,9362,998,206

3,545,228
736,072
23,866
157,136△23,010
4,439,294

193,854
14,473208,328

180,131
12,271
192,403

11,267102
11,3699,378
289,806102
299,286

56,80043,633
212,055
277,356
11,524
601,370821,068

3,591
49,036
214,864
232,20766
499,766
991,456

3,819,274

5,277
5,277
5,436,027

(Thousands of yen)
The Previous fiscal year
(As of Dec 31, 2021)
Liabilities
Current liabilities
Accounts payable
Short-term borrowings
Current portion of long-term debt
Accounts payable
Income taxes payable
Accrued bonuses
Provision for directors' bonuses
Provision for shareholder benefit program
Other
Total current liabilities
Fixed liabilities
Long-term debt
Asset retirement obligations
Total long-term liability
Total liabilities
Net assets
Shareholders' equity
Paid-in Capital
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Other accumulated comprehensive income
Foreign currency translation adjustments
Total accumulated other comprehensive income
Stock subscription rights
Stock acquisition rightNon-controlling shareholders' equity
Total net assets
Total liabilities and net assets-7-

The 2Q of current fiscal year
(As of Jun 30, 2022)

45,424
94,699259,633
553,014
7,079
323,095
1,282,944

71,989500,000
139,578
129,888
192,730
446,784
68,891
11,162351,045
1,912,071

82,26282,262
1,365,207

707,908
81,760789,668
2,701,739

178,723558,745
1,696,822△36,575
2,397,717

205,175
571,1811,860,702△8,2462,628,812

9,380
9,380
46,9692,454,066
3,819,274

9,828
9,828
33,185
19,30943,152
2,734,288
5,436,027

(2) Statements of Income and Comprehensive Income(Statements of Income)(2Q Cumulative Period)(Thousands of yen)
2Q of previous fiscal year
(Jan 1, 2021 to Jun 30, 2021)
Net sales
Cost of sales
Gross income
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Equity in earnings of affiliates
Insurance dividend income
Reversal of allowance for doubtful accounts
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expense
Charges for stock compensation
Other
Total non-operating expenses
Ordinary income
Extraordinary losses
Write-down of investment securities
Total extraordinary loss
Current net income for the quarter before income taxes
and minority interests
Income taxes
Income taxes-deferred
Total income taxes
Net income
Quarterly net income attributable to non-controllingshareholders
Quarterly income attributable to owners of parent-8-

2Q of current fiscal year
(Jan 1, 2022 to Jun 30, 2022)

2,582,299
1,016,441
1,565,857
1,491,683
74,174

3,972,843
1,539,398
2,433,444
1,890,028
543,416

60
3,208
1,125
874
3,415
1,647
10,330

79
2,902
1,802
9,973
1,490
16,248

613
1,963
256
2,833
81,671

2,780
109
2,889
556,776-

53,50553,50581,671

503,270853
29,79330,64651,025

163,190
56,622219,813
283,457-

5,652

51,025

277,805

(Statements of Comprehensive Income)(2Q Cumulative Period)(Thousands of yen)
2Q of previous fiscal year
(Jan 1, 2021 to Jun 30, 2021)
Net income
Other comprehensive income
Foreign currency translation adjustments
Other total comprehensive income
Quarterly comprehensive income(Comprehensive income attributable to)
Quarterly comprehensive income attributable toowners of the parent
Quarterly comprehensive income attributable to noncontrolling shareholders-9-

2Q of current fiscal year
(Jan 1, 2022 to Jun 30, 2022)

51,025

283,457△1,710△1,71049,314447
447
283,905

49,314

278,253-

5,652

(3) Statements of Cash Flows(Thousands of yen)
2Q of previous fiscal year
(Jan 1, 2021 to Jun 30, 2021)
Net cash provided by (used in) operating activities
Current net income for the quarter before income taxes
and minority interests
Depreciation and amortization
Amortization of goodwill
Share of profit (loss) of entities accounted for using
equity method (△: profit)
Charges for stock compensation
Loss (gain) on revaluation of marketable securities(△: gain)
Increase (decrease) in accrued bonuses
Increase (decrease) in provision for directors' bonuses(△)
Increase (decrease) in allowance for doubtful accounts(△)
Increase (decrease) in provision for shareholder benefit
program (△)
Interest income
Interest expense
Increase (△) in notes and accounts receivable-trade
Increase (△) in operational investment securities
Increase (△) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other (△)
Other
Sub totalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash used in investing activities
Purchases of property, plant and equipment
Purchase of intangible assets
Additional investments in newly consolidated entities
Acquisition of shares of subsidiaries
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Purchase of deferred assets
Net cash used in investing activities
Net cash used in financing activities
Net increase (△) in short-term borrowings
Proceeds from long-term debt
Repayments of long-term debt
Purchase of treasury stock
Dividends paid
Cash dividends paid to non-controlling shareholders
Proceeds from exercise of stock options
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
Cash and cash equivalents at beginning of year
Period-end balance of cash and cash equivalents

2Q of current fiscal year
(Jan 1, 2022 to Jun 30, 2022)

81,671

503,270

17,879-20,406
15,252△3,20837,518△2,902-53,505△270,424△106,229

△874

5,747

4,767

4,082

△60
613
264,704
159△45,056△62,237△138,437△113,98260△826△203,896△318,645△79
2,780
393,502△14,028
11,35028,189△52,032
1,015,343
79△4,040△228,691
782,690940△1,00068,891△4,977△847-△230△238,932△2,500△860△5,824△5,277△246,860

2,371

9,816

△227,933

1,761,010

500,000△270,080△137,836
2,082
94,165

1,899,100
1,671,167- 10 -

83,636500,000
860,000△20,499△113,996△11,100
958
1,215,363

1,784,218
3,545,228

(4) Notes to Quarterly Consolidated Financial Statements(Going Concern)
Not applicable.
(Significant Changes in Shareholders' Equity)
Not applicable.
(Changes in Accounting Policies)(Application of Accounting Standard for Revenue Recognition)
The Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020,
hereinafter referred to as the "Accounting Standard for Revenue Recognition") from the beginning of the first quarter of thecurrent fiscal year and recognized revenue when control of promised goods or services is transferred to customers in an amountthat is expected to be received in exchange for those goods or services.
With regard to the application of the revenue recognition accounting standards, the transitional treatment stipulated in theprovisions of paragraph 84 of the Accounting Standard for Revenue Recognition is applied, and the cumulative effect ofretrospective application of a new accounting policy prior to the beginning of the first quarter of the current fiscal year is to be
added to or deducted from retained earnings at the beginning of the first quarter of the current fiscal year, and a new accounting
policy is to be applied from the beginning balance of the current fiscal year. However, there is no cumulative effect to be added
to or deducted from retained earnings at the beginning of the first quarter of the current fiscal year.
There is also no impact on the consolidated financial statements for the second quarter of the current fiscal year.
Due to the adoption of revenue recognition accounting standards, the "Notes and accounts receivable-trade," which waspresented in "Current assets" in the consolidated balance sheets for the previous fiscal year, is now included in "Notes andaccounts receivable-trade and contract assets" from the first quarter of the fiscal year under review. In accordance with thetransitional treatment set forth in paragraph 89-2 of the Revenue Recognition Accounting Standard, no reclassifications havebeen made to the prior period under the new presentation method. In addition, in accordance with the transitional treatment
stipulated in paragraph 28-15 of the "Accounting Standard for Quarterly Financial Statements" (ASBJ Statement No. 12,
March 31, 2020), information broken down revenues from contracts with customers for the second quarter of the previous
fiscal year is not presented.
(Application of Accounting Standard for Calculation of Fair Value)
The Accounting Standard for Calculation of Fair Value (ASBJ Statement No. 30, July 4, 2019, hereinafter referred to as the"Accounting Standard for Calculation of Fair Value") and other standards were applied from the beginning of the first quarterof the current fiscal year, and in accordance with the transitional treatment stipulated in paragraph 19 of the AccountingStandard for Calculation of Fair Value and paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ
Statement No. 10, July 4, 2019), the new accounting policy stipulated by the Accounting Standard for Calculation of Fair Value
will be applied in the future. There is no impact on the quarterly consolidated financial statements.
(Additional Information)(Accounting Estimate of the Impact of spread of COVID-19)
There have been no material changes in the assumptions described in (additional information) in the previous fiscal year's
financial statements in the accounting estimates related to the impact of the spread of the new Corona Virus Infectious
Disease (COVID-19).
(Method of Accounting for Deferred Assets)
Origination expenses are amortized on a straight-line basis over 5 years.

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(Segment Information)
Previous 2nd Quarter (From January 1, 2021 to June 30, 2021)
Disclosure is omitted because the business segments of the Group are a single segment.
Current Second Quarter (From January 1, 2022 to June 30, 2022)
1.Information on net sales and income (loss) by reportable segment and revenue decomposition information(Thousands of yen)Amount recorded inquarterly
Adjusted amountconsolidated
financial statements(Note)

Reportable segments
Consulting
Advisory
Business

Investment
business

Total

Net sales
Revenue from contracts withcustomers

3,972,843-

3,972,843-

3,972,843

-

-

-

-

-

Sales to customers

3,972,843-

3,972,843-

3,972,843

Intersegment sales

-

-

-

-

-

3,972,843-

3,972,843-

3,972,843

567,600△24,183

543,416-

543,416

Other income

Total
Segment profit (loss) (△)(NOTE)"Segment income (loss)" is consistent with operating income in the quarterly consolidated statements of income.
2.Changes in reportable segments
The reportable segments of the Group were previously a single segment. However, from the second quarter of the fiscal
year under review, the Company established Frontier Capital Inc.and added the "Investment Business" as a new reportablesegment in conjunction with the launch of an investment business involving the dispatch of management personnel. This
segment has been reclassified into two segments: "Consulting and Advisory Business" and "Investment Business."
Segment information for the second quarter of the previous fiscal year has been prepared using the reportable segmentclassification method for the second quarter of the fiscal year under review. Due to the addition of the "Investment
Business" from the second quarter of the fiscal year under review, no disclosure has been made.
3.Information on assets by reportable segment
Due to the inclusion of Frontier Capital Inc. in the scope of consolidation, the amount of segment assets in theInvestment Business for the second quarter of the current fiscal year increased by JPY1,005,733k from the end of theprevious fiscal year.

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