(Unaudited)

October 13, 2020
MORITO CO., LTD.
Financial Statement (Unaudited)
For the Third Quarter of the Fiscal Year ended November 30, 2020
(Translated from the Japanese original)
Corporate Information
Code：9837 Listings in First Section of the Tokyo Stock Exchange(URL : http://www.morito.co.jp/hd_en/ )Representative： Takaki Ichitsubo
Representative Director and President
Contact：
Makoto Tsuji
Managing Director of General Affairs Dept
Telephone: +81-6-6252-3551
Scheduled date of filing of Quarterly Report:
October 14, 2020
Scheduled date of dividend payment:－
Supplementary explanation material for quarterly financial results:
Yes
Presentation meeting for quarterly financial results:
None(Amounts rounded down)
1. Consolidated Financial Results for the Third Quarter of the Fiscal Year 2020(December 1, 2019 throughAugust 31, 2020)(1) Consolidated Financial Results(Percentages indicate year-on-year changes)
Net sales
Operating income
Ordinary income
Net income%%%%
Millions of yen
Millions of yen
Millions of yen
Millions of yen
3Q of FY 2020
29,942 △12.4
418 △61.5
417 △62.1
167 △83.1
3Q of FY 201934,177
7.1
1,088
1,100
991
25.9
△4.5
△6.4
(Note) Comprehensive income : △180 million yen (-%)(3Q of FY2020) △119 million yen (-％)(3Q of FY2019)

3Q of FY 2020
3Q of FY 2019

Net income
Per share
Yen
6.12
36.14

Fully diluted net
Income per share
Yen－－(2) Consolidated Financial Position
Total assets
Net assets
Equity ratio
Millions of yen
Millions of yen%
3Q of FY 2020
42,93331,70473.7
FY 2019
47,18532,725
69.2(Reference) Equity capital : 31,652 million yen (3Q of FY2020) 32,667 million yen (FY2019)
2. Dividends
Dividends per share
SecondThird
Fiscalquarter-end
quarter-end
year-end
Yen
Yen
Yen

First
quarter-end
Yen

AnnualYen

FY 2019
13.00
－
13.00
FY 2020
13.25
FY 2020－
4.75(Forecast)(Note) Revisions of dividend forecast to the latest announcement: None

26.00
18.00

3. Consolidated Forecast for FY 2020 (December 1, 2019 through November 30, 2020)(Percentages represent changes from corresponding period of previous year)
Net Sales
Millions ofyen%

Ordinary profit

Operating income
Millions ofyenMillions of
yen

%

%

40,000
600
600
△13.0
△65.4
△66.3
Full year(Note) Revision of performance forecast to the latest announcement: None1

Net income
Millions of
yen

300

%

△78.6

Net income
per share

Yen

10.96

(Unaudited)*Notes(1) Changes of important subsidiaries during the period : None (changes of specific subsidiaries in accordancewith changes in the scope of consolidation)
Newly included : None
Excluded : None
(2) Adoption of special accounting treatment for preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies and changes or restatement of accounting estimates(i)
Changes in accounting policies caused by revision of accounting standards:
Yes(ii)
Changes in accounting policies other than (i):
None
(iii)
Changes in accounting estimates:
None
(iv)
Restatements:
None* For details, please refer to “2. Quarterly Consolidated Financial Statements (3) Notes regarding Quarterly
Consolidated Financial Statements” on page 10.
(4) Number of outstanding shares (common shares）(i) Number of outstanding shares, including treasury shares at end of period:
30,800,000 shares(as of August 31, 2020)
30,800,000 shares(as of November 30, 2019)(ii) Number of shares of treasury stock at end of period:
3,420,060 shares(as of August 31, 2020)
3,420,060 shares(as of November 30, 2019)(iii) Average outstanding number of shares during the period:
27,379,940 shares(the 3Q of FY2020)
27,427,884 shares(the 3Q of FY2019)* This quarterly financial summary is not subject to quarterly review by certified public accountants or an audit
firm.
* Disclosure and other special notes regarding performance forecasts.
The forecast in this cumulative quarterly statement is based on information available to Morito Group andcertain premises which are deemed to be rational, and numbers we actually get may greatly differ from those in
the forecasts due to various factors.
As for supporting premises to the performance forecasts or notes to be kept in mind for the usage of thisforecasts, refer to “1. Qualitative Information for the Period under Review (2) Forecasts of Consolidated BusinessResults and other Forward-looking Information” on page 5.
In addition, we have introduced “Stock Granting Trust (J-ESOP)” and “Board Incentive Plan (BIP)”.
Consequently, the shares held by Custody Bank of Japan, Ltd., and the Master Trust Bank of Japan, Ltd., areincluded in the treasury stock.
Custody Bank of Japan, Ltd. was inaugurated by the merger of JTC Holdings, Ltd., Trust & Custody Services
Bank, Ltd. and Japan Trustee Services Bank, Ltd. on July 27, 2020.

2

(Unaudited)Index
1. Qualitative Information for the Period under Review ......................................................................................4(1) Overview of Business Performance .............................................................................................................4(2) Forecast of Consolidated Business Results and other Forward-looking Informantion ........................5
2. Quarterly Consolidated Financial Statements .................................................................................................6(1) Quarterly Consolidated Balance Sheets......................................................................................................6(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income...................................................................................................................................................................8(3) Notes regarding Quarterly Consolidated Financial Statements .............................................................10[Notes on assumption of going concern] .............................................................................................................10[Notes on a Significant Change in Shareholders’ Equity] ....................................................................................10[Changes in accounting statements] ...................................................................................................................10[Additional Information] ........................................................................................................................................10[Segment Information] .........................................................................................................................................103

(Unaudited)

1. Qualitative Information for the Period under Review(1) Overview of Business Performance
In the Third quarter (from December 1, 2019 through August 31, 2020) of the fiscal year ended November 30th,
2020, the global epidemic of the novel coronavirus led to lockdowns and emergency declarations in many
countries, which caused the global economy to stagnate at a level never before experienced. Therefore in the
consolidated cumulative third quarter (from June 1, 2020 through August 31, 2020), there was growing concern
about the downside risk of the economy due to the second wave of infection spread.
In such circumstances, Morito Group who deals with apparel materials and consumer products has beenpushing forward with the 8th mid-term management plan and aiming for continuous business growth by creating
values new value for the Morito Group beyond the value-added our items, under the corporate vision of 『Create
Morito’s existence value, Realize“New Morito Group”』. In the consolidated cumulative third quarter, ourbusiness was in the difficult situation. Firstly, it was because that the business of apparel materials was affectedby self-restraint of department stores and mass retailers to prevent the spread of the novel coronavirus aroundthe world. Secondly, it was because that the business of consumer products was affected by the suspension of
automobile-related factories in Japan and overseas for a certain period time. On the other hand, we worked to
expand our business by receiving orders for products related to new lifestyles in the corona disaster andcapturing new needs in response to the growing demand for staying home.
As a result, in the current quarterly performance reaches net sales ¥29,942 million (decreased by 12.4% from ayear earlier), operating income ¥418 million (decreased by 61.5% from a year earlier), ordinary income ¥417
million (decreased by 62.1 % from a year earlier), net income ¥167 million (decreased by 83.1 % from a year
earlier).
The exchange rate used for the oversea subsidiaries’ consolidated financial statement of the current quarterend as below:
1Q

2Q

3Q

USD

108.76 （112.91）

108.87 （110.23）

107.63 （109.90）

EUR

120.32 （128.82）

120.09 （125.16）

118.58 （123.50）

RMB

15.44 （16.32）

15.59 （16.33）

15.17 （16.07）

HKD

13.90 （14.42）

14.01 （14.05）

13.89 （14.02）

TWD

3.57 （3.66）

3.62 （3.58）

3.60 （3.53）

VND

0.0047 （0.0048）

0.0047 （0.0047）

0.0046 （0.0047）

THB

3.59 （3.44）

3.48 （3.49）

3.37 （3.48）

MXN

5.65 （5.70）

5.49 （5.74）

4.63 （5.75）(Notes)1. ( ) is the exchange rate of the quarter of FY2019.

Segment information as below[Japan]As for the apparel division, sales of items related to new demand for masks and other products increased,
but sales of accessories for casual wear, working wear and men’s heavy clothing decreased.
In the consumer product division, sales of skateboards and other sports-related products and products for
one dollar shops increased by growing demand for staying home, but sales of products related to automobileinterior components decreased.
As a result, net sales reached 21,105 million yen (decreased by 13.4% from a year earlier).
[Asia]
As for the apparel division, sales of accessories to apparel manufacturers decreased.
In the consumer product division, sales of automobile interior components to Japanese auto manufacturers
increased in China. As a result, net sales reached 5,258 million yen (decreased by 2.4% from the previous
4

(Unaudited)

year).
[Europe and the U.S.]
As for the apparel division, sales of accessories to medical industry increased, but sales of accessories toapparel manufacturers decreased.
In the consumer product division, sales of automobile interior components to Japanese auto manufacturers
in Europe and the US decreased.
As a result, net sales reached 3,579 million yen (decreased by 18.8% from the previous year).
(2) Forecast of Consolidated Business Results and other Forward-looking Information
The consolidated financial forecast for the fiscal year ending November 30, 2020 remains unchanged from thefigures announced in the “Financial Statement For the Second Quarter of the Fiscal Year ended November 30,
2020” (July 13, 2020).

5

(Unaudited)

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets
FY 2019(As of November 30, 2019)
Thousands of yen

FY 2020(As of August 31, 2020)
Thousands of yen

AssetsCurrent assets
Cash and deposits

9,716,355

9,574,207

Notes and accounts receivable
Inventory
Other current assets

11,773,061
5,083,679
1,115,458

8,859,817
5,480,287
685,475

Allowance for doubtful accounts
Total current assets△30,645
27,657,908△32,751
24,567,036

Fixed assets
Tangible fixed assets
Land

4,074,904

4,074,783

Other tangible fixed assets
Total tangible fixed assets
Intangible fixed assets

5,735,985
9,810,890

5,611,910
9,686,694

Goodwill
Other Intangible fixed assets

2,839,168
1,154,248

2,656,609
1,102,720

Total intangible fixed assets
Investments and other fixed assets
Investment securities

3,993,417

3,759,330

4,396,289

3,781,186

268,300
1,120,508

264,975
938,938△67,253
5,717,844
19,522,152△67,4314,917,669
18,363,693

5,601
47,185,662

2,450
42,933,181

Net defined benefit asset
Other fixed assets
Allowance for doubtful accountTotal investments and other fixed assets
Total fixed assets
Deferred assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable

4,859,108

3,807,577

Short-term loans payable
Current portion of bonds
Current portion of long-term debt

50,000400,000
506,666

50,000400,000
530,000

Accrued tax payable
Reserve for bonuses

441,253
229,983

134,296
179,051

71,5952,333,488
8,892,095

30,567
1,269,404
6,400,898

Reserve for director’s bonuses
Other current liabilities
Total current liabilities
Fixed liabilities
Bonds payable
Long-term debt
Provision for retirement benefit by stock
Provision for director’s retirement benefit
Provision for director's retirement benefit by stock
Provision for environmental measures
Net defined benefit liability
Other fixed liabilities
Total fixed liabilities
Total liabilities

6200,000－

2,674,590
31,82457,2492,230,422
37,66462,53756,42819,360892,694

70,223
19,320883,986

1,635,921
5,568,069

1,523,307
4,827,462

14,460,164

11,228,360

(Unaudited)
FY 2019(As of November 30, 2019)
Thousands of yen
Net Assets
Shareholders' equity
CapitalCapital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Difference in revaluation of land
Foreign currency translation adjustment
Remeasurement of defined benefit plans
Total other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

7

FY 2020(As of August 31, 2020)
Thousands of yen

3,532,492
3,503,243
26,072,687△2,222,696
30,885,726

3,532,492
3,507,603
25,403,252△2,227,056
30,216,291

1,185,435
946
451,115
170,300△25,723
1,782,074
57,697－32,725,498
47,185,662

810,915△9451,115
192,837△18,604
1,436,254
57,172△4,89631,704,820
42,933,181

(Unaudited)(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income
The Third Quarter accounting period
FY 2019(December 1, 2018 throughAugust 31, 2019)
Thousands of yen

FY 2020(December 1, 2019 throughAugust 31, 2020)
Thousands of yen

Net sales

34,177,031

29,942,830

Cost of sales
Gross profit
Total selling, general and administrative expense

25,021,525
9,155,505
8,066,893

22,192,423
7,750,406
7,331,748

Operating Income
Non-operating income

1,088,612

418,657

Interest received
Dividends received

20,82953,232

11,24553,229Rent on real estate
Equity in earnings of affiliates

50,50750,89850,17828,435

Other non-operating income

46,68454,390Total non-operating income
Non-operating expenses

222,152

197,479

Interest paid
Cash discount on sales

6,912
63,422

10,232
51,534Foreign Exchange Loss
Others non-operating expense

44,087
96,213

58,111
78,962

210,635
1,100,129

198,841
417,295

Gains on sales of fixed assets
Gains on sales of investment securities

322,484
85,339867
14,991Gain on reversal of subscription rights to shares
Total extra ordinary income

367
408,191

525
16,38367
4,037

17,526
3,798

Loss on sales of investment securities
Loss on sales of golf club memberships

415
－

－
1,080

Loss on valuation of investment securities－

13,442

Loss on valuation of golf club membership

－

5,374

5,307
－

－
26,561

9,827
1,498,493

67,783365,896

Total non-operating expense
Ordinary Income
Extra ordinary income

Extra ordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets

Loss of business restructuring
Loss of the novel coronavirus
Total extra ordinary loss
Net income before taxes and other adjustment
Corporate, inhabitant and business taxes

570,954

276,651

Adjustments to corporate and other taxes
Total income taxes△63,573507,380△75,829
200,821

Net income
Profit(Loss) attributable to non-controlling interests

991,112－

165,075△2,411

Profit(Loss) attributable to owners of parent

991,112167,4868

(Unaudited)

Quarterly Consolidated Statements of Comprehensive Income
The Third Quarter accounting period
FY 2019
FY 2020(December 1, 2018 through (December 1, 2019 throughAugust 31, 2019)
August 31, 2020)
Thousands of yen
Thousands of yen
Net Income
Other comprehensive income
Unrealized gain(loss) on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Adjustments to retirement benefit
Share of other comprehensive income of associates accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attribute to the parent
Comprehensive income attribute to the minority shareholders

9991,112

165,075△533,091△677△595,798
18,971△374,520△956
22,536
7,118△0△1,110,597△119,484

0△345,820△180,745△119,484－△178,334△2,411

(Unaudited)(3) Notes regarding Quarterly Consolidated Financial Statements[Notes on assumption of going concern]
Not applicable.
[Notes on a Significant Change in Shareholders’ Equity]
Not applicable.
[Changes in accounting statements]
Some overseas consolidated subsidiaries have applied IFRS 16 “Leases” from the beginning of the first quarter
consolidated accounting period, and in principle, lessees recognize all leases as assets and liabilities. Regarding
the application of this accounting standard, the method of recognizing the cumulative effect of the application ofthis standard, which is permitted as a transitional measure, on the date of initial application is adopted.
The impact of this change on the quarterly consolidated financial statements for the current third quarter
consolidated cumulative period is immaterial.
[Additional Information](Impact of the Novel Coronavirus on Accounting Estimate)In the Third quarter (from December 1, 2019 through August 31, 2020) of the fiscal year ended November 30th,
2020, the global epidemic of the novel coronavirus led to lockdowns and emergency declarations in many
countries, which caused the global economy to stagnate at a level never before experienced. Therefore in the
consolidated cumulative third quarter (from June 1, 2020 through August 31, 2020), there was growing concern
about the downside risk of the economy due to the second wave of infection spread.
In such circumstances, the assumptions used in the accounting estimates associated with the novel coronavirus
infections in the Japan, Asia, Europe and the United States segments remain unchanged from those included in
the additional information for the Financial Statement (Unaudited) For the Second Quarter of the Fiscal Year
ended November 30, 2020.
[Segment Information]
I. The Third Quarter of FY 2019 (December 1, 2018 through August 31, 2019)
1. The information on net sales, income or loss by reportable segment(Thousands of yen)
Reportable Segment

Net Sales
Sales to externalcustomers
Inter segment sales
and transfer
Total
Segment income

Adjustment(Note 1)

Consolidated
Statement
Amount(Note 2)

Japan

Asia

EU and US

Total

24,381,730

5,389,914

4,405,385

34,177,031－

34,177,031

1,825,944

1,914,478

13,3403,753,763△3,753,763－

26,207,675
1,118,025

7,304,393
385,196

4,418,726
147,667

37,930,795
1,650,889△3,753,763△562,277

34,177,031
1,088,612(Notes)1. Adjustment of △562,277 thousand yen includes corporate expenses of △434,647 thousand yen that are notdistributed to each reportable segment and other△127,629 thousand yen.
2. The amount of segment income is adjusted with operating profits on the consolidated quarterly profit and loss
statements.
2. Change in reportable segments(Change in method of measuring income or loss by reportable segments)

From the consolidated cumulative third quarter (from June 1, 2020 through August 31, 2020), the criteria forallocation of corporate expenses have been changed by the transition to a holding company structure. Groupmanagement costs mainly incurred by the holding company, are not distributed to each reportable segment and areused as corporate expenses.
Therefore, the segment income of the "Japan" segment increased by 182,203 thousand yen and the adjustment
of segment income decreased by 182,203 thousand yen compared to the previous method.
10

(Unaudited)

II. The Third Quarter of FY2020 (December 1, 2019 through August 31, 2020)
1. The information on net sales, income or loss by reportable segment(Thousands of yen)
Reportable Segment

Net Sales
Sales to externalcustomers
Inter segment sales
and transfer
Total
Segment income

Adjustment(Note 1)

Consolidated
Statement
Amount(Note 2)

Japan

Asia

EU and US

Total

21,105,182

5,258,336

3,579,312

29,942,830－

29,942,830

935,972

1,662,987

43,1532,642,114△2,642,114－

22,041,154
434,018

6,921,323
214,8033,622,465△70,164

32,584,944
578,658△2,642,114△160,000

29,942,830
418,657(Notes)1. Adjustment of △160,000 thousand yen includes corporate expenses of △156,061 thousand yen that are notdistributed to each reportable segment and other △3,938 thousand yen.
2. The amount of segment income is adjusted with operating profits on the consolidated quarterly profit and loss
statements.

11