Consolidated Financial Results
for the Second Quarter of the Fiscal Year
Ended November 30, 2021 [Japanese GAAP]
July 13, 2021
Company name: MORITO CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 9837
URL: http://www.morito.co.jp/hd_en/
Representative: Takaki Ichitsubo, Representative Director, CEOContact: Kiyomi Akui, Director, Senior Executive Officer, Division Manager of Corporate Administrative Division
and Division Manager of Business Management Division
Phone: +81-6-6252-3551
Scheduled date of filing quarterly securities report: July 14, 2021
Scheduled date of commencing dividend payments: August 6, 2021
Availability of supplementary briefing material on annual financial results: Available
Schedule of annual financial results briefing session: Scheduled (for securities analysts and institutional investors)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ended November 30, 2021
(December 1, 2020 to May 31, 2021)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen%

Million yen

Million yen%

2Q of FY 2021
21,2250.1
775
87.9
885 120.4
533(5.4)(45.5)(47.3)
2Q of FY 2020
21,198412
401
154(Note) Comprehensive income: 2Q of the Fiscal year ended November 30, 2021: ¥1,399 million [- %]2Q of the Fiscal year ended November 30, 2020: ¥(261) million [- %]245.6(70.5)

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

2Q of FY 2021
19.49
2Q of FY 2020
5.64
(2) Consolidated Financial Position
Total assets
Million yen%

Million yen%

Net assets

Equity ratio

Million yen%

44,71233,282
2Q of FY 2021
32,015FY 2020
43,699(Reference) Equity: As of May 31, 2021: ¥33,226 million
As of November 30, 2020: ¥31,958 million

74.3
73.1

2. Dividends
Annual dividends
1st
2nd
3rd
Year-endquarter-end quarter-end quarter-end

Total

Fiscal year ended
Yen
Yen
Yen
Yen
Yen
November 30, 2020
13.25
4.75 18.00
November 30, 2021
9.00
Fiscal year ending
November 30, 2021
9.00 18.00(Forecast)(Note) Revisions of dividend forecast to the latest announcement: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending November 30, 2021 (December 1, 2020 toNovember 30, 2021)(% indicates changes from the previous corresponding period.)
Operating profit

Net sales
Million yen%

Million yen

Profit attributable Basic earnings per
to owners of parent
share

Ordinary profit% Million yen% Million yen

Full year
43,000
5.6
1,300
51.8
1,300
40.1
(Note) Revisions of performance forecast to the latest announcement: None

700

%

Yen

48.9

25.57

* Notes:(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting inchanges in the scope of consolidation): No(2) Adoption of the special accounting treatment for preparing quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates, and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (common shares)
1) A total number of issued shares at the end of the period (including treasury shares):2Q of the fiscal year ended November 30, 2021: 30,800,000 shares
November 30, 2020: 30,800,000 shares2) Total number of treasury shares at the end of the period:
2Q of the fiscal year ended November 30, 2021: 3,417,660 shares
November 30, 2020: 3,420,060 shares
3) The average number of shares during the period:
2Q of the fiscal year ended November 30, 2021: 27,381,454 shares
2Q of the fiscal year ended November 30, 2020: 27,379,940 shares* These quarterly consolidated financial results are outside the scope of the audit by certified public accountants or
audit firms.
* Explanation of the proper use of financial results forecast and other notes
The earnings forecasts and other forward-looking statements herein are based on information currently available
and certain assumptions judged to be reasonable. Actual results may differ significantly from these forecasts due toa wide range of factors.
As for suppositions that form the assumptions for the forecast of financial results and cautionary notes concerning
the use thereof, please refer to “1. Overview of Business Results, etc. (2) Forecast of Consolidated BusinessResults and other Forward-looking Information ” on page 3.
The Company and some of the Morito Group companies have introduced the “Japanese version of the employee
stock ownership plan (J-ESOP)” and the “officer remuneration board incentive plan (BIP) trust.” Consequently,
the shares of the Company held by Custody Bank of Japan, Ltd. (trust account E) and The Master Trust Bank ofJapan, Ltd. (officer remuneration BIP trust account), respectively, are included in treasury shares.

Table of Contents
1. Qualitative Information for the Period under Review ...................................................................................... 2(1) Overview of Business Results for the Period under Review ........................................................................ 2(2) Forecast of Consolidated Business Results and other Forward-looking Information .................................. 3
2. Quarterly Consolidated Financial Statements and Primary Notes ................................................................... 4(1) Quarterly Consolidated Balance Sheets ....................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............................................... 6
Quarterly Consolidated Statements of Income .......................................................................................... 6
Quarterly Consolidated Statements of Comprehensive Income ................................................................ 7(3) Consolidated Statements of Cash Flows ...................................................................................................... 8(4) Notes to the Quarterly Consolidated Financial Statements ........................................................................ 10(Notes on Going Concern Assumption) ..................................................................................................... 10(Notes on Significant Changes in the amount of Shareholders' Equity ) ................................................... 10(Additional Information) ............................................................................................................................ 10(Segment Information, etc.) ....................................................................................................................... 111

1. Overview of Business Results, etc.
(1) Overview of Business Results for the Period under Review
In the Second quarter (from December 1, 2020 to May 31, 2021) of the fiscal year ended November 30,
2021, the business environment has remained unpredictable as COVID-19 global pandemic hasn’t resolved. On
the other hand in some regions, such as the U.S. and China economic activity has been restarting by vaccination.
Amid such circumstances, the Morito Group (the “Group”), which engages in the handling of apparelmaterials and consumer products, faced harsh business conditions due to adjusting inventories in department
stores and mass retailers, soaring costs of raw materials such as copper to manufacture the Group’s main
products such as eyelets and hooks and reducing production by automakers due to semiconductor shortage. In
spite of these conditions, the Group focused on promoting “C.O.R.E.” as the Group’s commitment for theenvironment, such as development and sale of accessories made from “REAMIDE”, the recycled material ofwaste fishing nets, launching GPS Watching Service “Mimalook”, as the first products and services that
integrate AI and Iot with subsidiary materials and accessories and selling products related to activities such asskateboarding and fishing that can be enjoyed outdoors at a safe social distance and products related to newlifestyle such as masks. Through these businesses, the Group has committed to achieving the Sustainable
Development Goals (SDGs), strengthening our profitability. In addition, the Group has made efforts to review
unprofitable businesses.
As a result, for the fiscal year under review, net sales increased by 0.1% year on year to ¥21,225 million.
Operating profit increased by 87.9% to ¥775 million, ordinary profit increased by 120.4% to ¥885 million, andprofit attributable to owners of parent increased by 245.6% to ¥533 million.
Exchange rates used for the conversion of revenue and expenses of the Group’s overseas subsidiaries during
the preparation of consolidated financial statements for the second quarter of fiscal year under review are as
follows.
1Q

2Q

USD

104.51 （108.76） 106.09 （108.87）

EUR

124.58 （120.32） 127.80 （120.09）

CNY

15.81

（15.44）16.38（15.59）

HKD

13.48

（13.90）13.68（14.01）TWD

3.67（3.57）

3.78（3.62）

VND

0.0045THB

3.42（3.59）

3.50（3.48）

MXN

5.08（5.65）

5.21（5.49）(Note)（0.0047） 0.0046 （0.0047）

The exchange rate of the same period in the previous fiscal year is stated in parentheses.

Business results by segment are as follows.
[Japan]In the apparel division, sales of clothes related to sports and outdoor activities increased by demand for stayhome, but sales of accessories for thick-fabric wear, bag and shoes decreased.
In the consumer product division, sales of automobile interior components to Japanese automobile
manufacturers, products for dollar stores, products related to PC such as tablet cases and mouse pads andproducts related to surfing and skateboard increased, but sales of products related to snowboards and safety for2

construction site decreased.
As a result, net sales decreased by 2.2% year on year to ¥14,638 million.
[Asia]In the apparel division, sales of accessories to Japanese apparel manufacturers in Thailand decreased due tothe state of affairs in Myanmar, but sales of accessories to Europe and the U.S. apparel manufacturers in Hong
Kong increased.
In the consumer product division, sales of automobile interior components to Japanese automobile
manufacturers increased in China.
As a result, net sales increased by 13.4% year on year to ¥4,079 million.
[Europe and the U.S.]
In the apparel division, sales of accessories to apparel manufacturers in Europe decreased.
In the consumer product division, sales of automobile interior components to Japanese automobile
manufacturers in Europe increased, but sales of automobile interior components to Japanese automobile
manufacturers in the U.S. decreased.
As a result, net sales decreased by 4.9% year on year to ¥2,507 million.

(2) Forecast of Consolidated Business Results and other Forward-looking Information
The consolidated financial forecast for the fiscal year ending November 30, 2021 remains unchanged from thefigures announced at January 14, 2021.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)
As of November 30, 2020
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Inventory
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Fixed assets
Land
Other
Total fixed assets
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for share-based remuneration
Provision for retirement benefits for directors (andother officers)
Provision for share-based remuneration for directors(and other officers)
Provision for environmental measures
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

As of May 31, 2021

10,125,070
9,957,014
4,721,852
733,414(40,942)
25,496,410

10,292,103
10,093,219
4,517,262
456,535(38,890)
25,320,229

4,076,183
5,489,802
9,565,985

4,592,840
5,426,228
10,019,068

2,561,362
1,089,779
3,651,142

2,531,812
1,094,249
3,626,061

3,940,908
221,671889,879(67,945)
4,984,514
18,201,643
1,400
43,699,454

4,567,233
224,372
1,024,689(69,541)
5,746,754
19,391,885－
44,712,114

4,255,918
50,000200,000
530,000
98,125
184,683

4,241,560
50,000－519,616
385,453
159,424

50,841

41,817

1,557,809
6,927,378

1,425,279
6,823,151

2,097,922
37,453

1,843,306
34,93462,09965,90075,432

81,23018,974918,297
1,546,555
4,756,735
11,684,114

19,855
913,469
1,647,346
4,606,043
11,429,195(Thousand yen)4As of November 30, 2020
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of May 31, 2021

3,532,492
3,507,603
25,703,378(2,227,056)
30,516,416

3,532,492
3,507,603
26,104,387(2,226,119)
30,918,362

945,536
118
451,115
112,743(67,659)
1,441,855
57,067－32,015,339
43,699,454

1,358,304
80
451,115
553,584(55,175)
2,307,908
56,647－33,282,919
44,712,114

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income from real estate
Share of profit of entities accounted for using equity
methodSubsidies for employment adjustment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Sales discounts
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on reversal of share acquisition rights
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on sales of golf club memberships
Loss on valuation of investment securities
Loss on valuation of golf club membership
Restructuring loss
Loss on COVID
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

December 1, 2019May 31, 2020
21,198,721
15,701,304
5,497,416
5,084,570
412,846

December 1, 2020May 31, 2021
21,225,009
15,733,368
5,491,641
4,715,777775,864

8,081
37,31434,007

4,861
36,832
32,84924,792

22,665－35,885140,082

57,914
29,127
184,251

7,485
37,55250,851
55,483
151,372401,556

5,419
29,103
1,052
39,32874,904885,211

408
－
420
828

－
52
420
472

－
2,246
1,080
10,663
5,374－
26,14445,508356,876
265,141(60,899)
204,241
152,635(1,789)154,424

29
279
－
－
－
17,063－
17,371
868,311414,187(79,561)
334,626
533,685－533,685

Quarterly Consolidated Statements of Comprehensive Income(Thousand yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
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
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

December 1, 2019May 31, 2020
152,635

December 1, 2020May 31, 2021
533,685(495,470)
781
75,876
4,745

412,767(38)
440,841
12,4832

1(414,064)(261,428)

866,053
1,399,739(259,639)

1,399,739(1,789)－(3) Consolidated Statements of Cash Flows(Thousand yen)

December 1, 2019May 31, 2020
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for bonuses
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for retirement benefits
for directors (and other officers)
Increase (decrease) in provision for share-based
remuneration
Increase (decrease) in provision for share-based
remuneration for directors (and other officers)
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Subsidies for employment adjustment
Share of loss (profit) of entities accounted for using
equity method
Gain on reversal of share acquisition rights
Loss (gain) on sales of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on sales of golf club memberships
Loss (gain) on valuation of investment securities
Loss on retirement of non-current assets
Loss on COVID
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies for employment adjustment received
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Collection of loans receivable
Other, net
Net cash provided by (used in) investing activities

8

December 1, 2020May 31, 2021

356,876
492,086
119,499(62,728)
3,177(4,107)868,311464,810
117,167(27,705)
7,175
16,968

6,925

3,800

7,123

(2,518)

8,584

5,797

(2,667)(45,396)
7,485－(2,059)(41,693)
5,419(57,914)(24,792)(22,665)

(420)
(408)
－
1,080
10,663
2,246
26,144
1,933,278(357,055)(1,014,064)(439,068)
1,024,463
45,395(7,379)－(478,066)
584,413

(420)
29
(52)
－
－
279
－
(42,864)
310,584(157,823)
42,724
1,487,350
41,676(5,530)38,900(73,026)
1,489,370

215,497(17,185)－(127,730)
3,570(36,543)
3,600
(174)
41,033

4,798(19,456)
1,402(680,577)
449(48,108)
3,600
(991)
(738,885)

(Thousand yen)

December 1, 2019May 31, 2020
Cash flows from financing activities
Repayments of lease obligations
Repayments of lease liabilities
Repayments of long-term borrowings
Redemption of bonds
Dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period

9

December 1, 2020May 31, 2021

(26,355)(73,585)(265,000)(200,000)(362,594)(927,535)
28,774(273,314)
9,442,330(11,059)(87,891)(265,000)(200,000)(132,676)(696,627)
108,574
162,432
10,052,070

32,779－9,201,794

10,214,503

(4) Notes to the Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on Significant Changes in the amount of Shareholders' Equity)
Not applicable.
(Additional Information)(Impact of COVID-19 pandemic on accounting estimates)
In the Second quarter (from December 1, 2020 to May 31, 2021) of the fiscal year ended November 30,
2021, the business environment has remained unpredictable as COVID-19 global pandemic hasn’t resolved. On
the other hand in some regions, such as the U.S. and China economic activity has been restarting by vaccination.
Amid such circumstances, the assumptions used in the accounting estimates for the COVID-19 in Japan, Asia,
Europe and the U.S. have not changed from the additional information in the financial statements for theprevious fiscal year.
Although the estimates are based on the information available at this point in time, there is a possibility thatthe business results and financial position of the Group may be affected if there is a difference between the
expected recovery trend and the actual trend in the future.

10

(Segment Information, etc.)[Segment information]
I.

For the Second Quarter of the fiscal year ended November 30, 2020
Information on amounts of net sales, profit (loss) by reportable segment(Thousand yen)

Total

Adjustment(Notes 1)

Amountrecorded in
Consolidated
Financial
Statements(Note 2)

21,198,721
1,873,426
23,072,148
506,305－(1,873,426)(1,873,426)(93,459)

21,198,721－
21,198,721
412,846

Reportable Segment

Net sales
Net sales to external customers
Inter-segment sales or transfers
Total
Segment profit

Japan

Asia

14,964,133
671,139
15,635,272
389,4813,598,624
1,172,818
4,771,443
147,457

Europe andthe U.S.

2,635,963
29,4682,665,432(30,633)(Notes) 1. The adjustment of ¥(93,459) thousand to segment profit includes corporate expenses of ¥(103,425) thousand notallocated to the reportable segments, and other in the amount of ¥(9,965) thousand.
2. The amount of segment profit has been adjusted with operating profit in the Quarterly Consolidated Statements ofIncome.

II.

For the Second Quarter of the fiscal year ended November 30, 2021
Information on amounts of net sales, profit (loss) by reportable segment(Thousand yen)

Europe andthe U.S.

Total

Adjustment(Notes 1)

Amountrecorded in
Consolidated
Financial
Statements(Note 2)

2,507,776
25,4682,533,244
49,616

21,225,009
1,964,182
23,189,192
867,853－(1,964,182)(1,964,182)(91,988)

21,225,009－
21,225,009
775,864

Reportable Segment

Net sales
Net sales to external customers
Inter-segment sales or transfers
Total
Segment profit

Japan

Asia

14,638,044
860,556
15,498,601
670,258

4,079,188
1,078,157
5,157,345
147,977(Notes) 1. The adjustment of ¥(91,988) thousand to segment profit includes corporate expenses of ¥(99,599) thousand notallocated to the reportable segments, and other in the amount of ¥7,610 thousand.
2. The amount of segment profit has been adjusted with operating profit in the Quarterly Consolidated Statements ofIncome.

11