Kyoritsu Maintenance Co., Ltd.

(Securities Code: 9616)

Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal YearEnding March 31, 2023
[JGAAP]
February 2023

1

Summary of Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending
March 31, 2023 [based on Japanese GAAP]
February 9, 2023
Listed exchange: Tokyo

Name of listed company:
Kyoritsu Maintenance Co., Ltd.
Code:
9616
URL https://www.kyoritsugroup.co.jp/
Representative:(Title) President(Name) Koji Nakamura
Contact:(Title) Managing Director(Name) Manabu Takaku
Scheduled filing date of Quarterly Report:
February 13, 2023
Scheduled date of start of dividend payment: Supplementary materials for the quarterly financial results: Yes
Investor conference for the quarterly financial results: None

Tel. +81-3-5295-7778(Rounded down to the nearest million yen)

1.

Consolidated financial results for the first nine months of the fiscal year ending March 31, 2023 (April 1, 2022 to December 31,
2022)(1) Consolidated Operating Results(Percentage figures represent year-over-year changes)

Net sales

Operating profit

Profit (loss)
attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

Nine months ended December 31, 2022

129,131

22.9

6,825

–

6,575

–

4,143

–

Nine months ended December 31, 2021

105,066

15.0-5,253–-4,871–-3,930–(Note) Comprehensive income:The nine months ended December 31, 2022: 5,110 million yen (–%)
The nine months ended December 31, 2021: -3,929 million yen (–%)

Profit (loss)
per share

Diluted net income
per share
Yen

Yen

Nine months ended December 31, 2022

106.27

91.01

Nine months ended December 31, 2021

-100.82–(Note) Diluted net income per share for the previous fiscal year is omitted since the Company recorded net loss per share and there were no potentiallydilutive shares.

(2) Consolidated financial position
Total assets

Total net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

As of December 31, 2022

235,962

74,97031.8

1,922.32

As of March 31, 2022

241,723

70,58629.2

1,810.40(Reference) Shareholders’ equity: As of December 31, 2022: 74,970 million yen As of March 31, 2022: 70,586 million yen

2.

Dividends
Annual dividends
Q3 end
Yen
Yen
10.00
–

Q1 endQ2 endYear ended March 31, 2022

Yen–

Year ending March 31, 2023

–

10.00

Year end
Yen
10.00

Total
Yen
20.00

–

Year ending March 31, 2023 (Forecast)

10.00

20.00

(Note) Revision from most recently announced dividends forecasts: None3.

Forecasted consolidated results for the fiscal year ending March 31, 2023 (April 1, 2022 to March 31, 2023)(Percentage figures represent year-over-year changes)

Net sales

Full Year

Operating profit

Net income
attributable to ownersof parent

Ordinary profit

Net income pershare

Millionyen%

Millionyen%

Millionyen%

Million
yen

%

Yen

170,000

-2.1

5,500

284.2

5,100

181.1

2,800

419.4

71.79

(Note) Revision from most recently announced earnings forecasts: None2

*Notes(1) Changes in major subsidiaries during the period under review (changes in specific subsidiaries accompanied by changes in thescope of consolidation): None
(2) Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: Yes(Note) For details, please see “(3) Notes on Quarterly Consolidated Financial Statements, (Application of special accounting
procedures in the preparation of quarterly consolidated financial statements)” under “2. Quarterly Financial Statements
and Major Notes” on page 11.
(3) Changes in accounting policies, changes in accounting estimates, and restatements(i) Changes in accounting policies due to revision of accounting standards, etc.:

Yes(ii) Changes in accounting policies other than those under (i) above:(iii) Changes in accounting estimates:

None
None

(iv) Retrospective restatements:

None(4) Number of issued shares (common stock)(i) Number of issued shares at the end of
the period (including treasury shares)(ii) Number of treasury shares at the endof the period(iii) Average number of shares
during the period

As of December 31,
2022

39,219,818 Year ended
shares March 31, 2022

39,219,818
shares

As of December 31,
2022

219,557 Year ended
shares March 31, 2022

230,499
shares

As of December 31,
2022

38,996,022 As of December 31,
shares 2021

38,990,010
shares*Summaries of quarterly financial results are not subject to auditing by a certified public accountant or auditing firm.
*Explanation of the appropriate use of earnings forecasts and other special notes(Note concerning forward-looking statements)
The forward-looking statements, including earnings forecasts and other future projections contained in this document are basedon information available to the Company at the time of preparation and on certain assumptions deemed reasonable by theCompany. As such, they do not constitute an assurance that the Company promises to achieve these projected results. Actual
business results may differ materially from the forecasts due to various factors.
Please see “(3) Explanation of Forecasts of Consolidated Results and Other Forward-Looking Information” under “1.
Qualitative Information on Quarterly Results” on page 6 for the assumptions used for the forecast of financial results and notes
concerning the use of the forecast of financial results.
(How to obtain supplementary materials on quarterly financial results)
Supplementary materials on quarterly financial results are posted to TDnet on the same date and to the Company website.

3

Table of contents for attached materials
1. Qualitative Information on Quarterly Results........................................................................................................................................ 5(1) Explanation of Operating Results .................................................................................................................................................... 5(2) Explanation of Financial Position .................................................................................................................................................... 6(3) Explanation of Forecasts of Consolidated Results and Other Forward-Looking Information ......................................................... 6
2. Quarterly Financial Statements and Major Notes .................................................................................................................................. 7(1) Quarterly Consolidated Balance Sheet............................................................................................................................................. 7(2) Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive Income .............................. 9(Quarterly Consolidated Income Statement)(Nine Months Ended December 31, 2022) ................................................................................................................................. 9(Quarterly Consolidated Statement of Comprehensive Income)(Nine Months Ended December 31, 2022) ............................................................................................................................... 10(3) Notes on Quarterly Consolidated Financial Statements ................................................................................................................. 11(Notes on the going concern assumption)...................................................................................................................................... 11(Notes concerning any notable changes in shareholders’ equity) .................................................................................................. 11(Application of special accounting procedures in the preparation of quarterly consolidated financial statements) ....................... 11(Changes in accounting policies) ................................................................................................................................................... 11(Additional information) ............................................................................................................................................................... 11(Segment Information etc.) ............................................................................................................................................................ 124

1. Qualitative Information on Quarterly Results(1) Explanation of Operating Results
Despite a trend toward normalization of social and economic activities during the first nine months of this consolidated fiscal
year, as seen by the easing of immigration and behavior restrictions imposed to stop the spread of COVID-19, the outlook for
the Japanese economy remains uncertain due to factors including skyrocketing energy costs and nagging concerns about aneighth wave of COVID-19.
The Group remained on the track toward recovery. Occupancy rates and average daily rates in the Hotel Business returned tonear pre-COVID levels thanks to increases in demand for domestic travel and inbound visitors to Japan as well as government
policies to stimulate tourism, including nationwide tourism-support measures. In terms of preventing the spread of infection,
while warnings of infection were receding, the Group continued to take thorough measures at all business sites, including
temperature checks, photocatalyst and other disinfection measures, and contactless services, to ensure safe and comfortable stays
for guests. Further, in December, the Group launched a new initiative, the Kyoritsu Maintenance Group membership program,otherwise known as Dormy’s Kyoritsu Hotels & Dormitories, which provides rewards for use of Group facilities and memberonly services.
As a result, the Group returned to profitability in the first nine months of this consolidated fiscal year, recording net sales of
129,131 million yen (up 22.9% YoY), operating profit of 6,825 million yen (vs. operating loss of 5,253 million yen in the same
period of the previous fiscal year), ordinary income of 6,575 million yen (vs. ordinary loss of 4,871 million yen in the same
period of the previous fiscal year), and net income attributable to owners of parent of 4,143 million yen (vs. net loss of
3,930 million yen in the same period of the previous fiscal year). As part of efforts for future recovery in business results andresumed growth, we expect the cost of opening new facilities and repair costs to arise in the fourth quarter of this consolidated
fiscal year.
Segment business performance is reviewed below.
(i) Dormitory BusinessIn the Dormitory Business, the Group opened 19 facilities nationwide with a total of 1,921 rooms in April. Due in part to highregard for safety and security measures implemented at our dormitory facilities during COVID-19 and our focus on meeting
domestic demand, the numbers of Japanese students residing in the dormitories increased sharply. The period began with an
initial occupancy rate of 93.5% (up 1.4 percentage points from the previous year). The numbers of foreign students continued
to rise as well, thanks to the easing of immigration restrictions and other factors. The number of rooms under contract as ofJanuary 1 was up more than 1,000 rooms from the start of the period, almost returning to the pre-COVID level.
As a result, net sales were 36,706 million yen (up 7.9% YoY). Operating profit fell to 2,835 million yen (down 5.4% YoY)
due to the cost of opening new facilities, rising energy costs, and other factors.
(ii) Hotel BusinessIn the Hotel Business segment, the Company opened six facilities in the Dormy Inn Business: Natural Hotsprings Hana-namino-yu Onyado Nono Osaka-Yodoyabashi, Natural Hotsprings Fujisakura-no-yu Dormy Inn Express Fujisan-Gotemba, Natural
Hotsprings Morito-no-yu Onyado Nono Sendai, Natural Hotsprings Azumi-no-yu Onyado Nono Matsumoto, Natural
Hotsprings Dandan-no-yu Onyado Nono Matsue, and Natural Hotsprings Kibi-no-yu Dormy Inn Okayama. The Company
also opened three facilities in the Resorts Business: Kyoto Umekoji Kadensho, La Vista Tokyo Bay, and Shionoyu Onsen
Rengetsu.
Despite renewed growth in numbers of COVID-19 cases during the first nine months of this consolidated fiscal year, the HotelBusiness maintained high occupancy rates and average daily rates thanks to gradual growth in inbound tourism, in addition tonumerous guests using the highly regarded bathing, dining, and other services at Group hotels during the fall travel season,
and achieved a record profit in the third quarter of this consolidated fiscal year.
As a result, net sales amounted to 74,624 million yen (up 61.4% YoY). Operating profit was 5,870 million yen (vs. operating
loss of 7,296 million yen in the same period of the previous fiscal year), more than offsetting the cost of opening the newfacilities.
(iii) Comprehensive Building Management BusinessIn the Comprehensive Building Management Business, growth in hotel cleaning services and construction projects resulted
in net sales of 12,361 million yen (up 18.7% YoY) and operating profit of 222 million yen (up 103.2% YoY).

5

(iv) Food Service BusinessIn the Food Service Business, factors including growing numbers of contracted hotel restaurants, increased operations, andthe easing of business restrictions on restaurants resulted in net sales of 6,992 million yen (up 35.8% YoY) and operating profitof 177 million yen (vs. operating loss of 40 million yen in the same period of the previous fiscal year).
(v) Development Business
Due to a rebound from liquidation of real estate in the same period of the previous fiscal year, a decrease in construction
projects, and other factors, the Development Business reported net sales of 936 million yen (down 90.2% YoY) and operating
profit of 97 million yen (down 85.0% YoY).
(vi) Other Businesses
Other Businesses consist of the Senior Life Business (management and operation of senior residences), the Public Kyoritsu
Partnership (PKP) Business (services provided under contract to local governments), support business for people who live
alone, the insurance agency business, comprehensive human-resource services, the financial business, and the administrative
outsourcing business. The total of these businesses resulted in net sales of 11,688 million yen (up 3.1% YoY) and operating
profit of 70 million yen (down 80.4% YoY).

(2) Explanation of Financial Position(Assets)
Total assets at the end of the third quarter of this consolidated fiscal year stood at 235,962 million yen, down by 5,761 million
yen from the end of the previous consolidated fiscal year. Main factors for this decrease included declines in cash and deposits
and in construction in progress.
(Liabilities)
Liabilities at the end of the third quarter of this consolidated fiscal year stood at 160,991 million yen, down by 10,145 million
yen from the end of the previous consolidated fiscal year. This was mainly due to declines in bonds payable and long-termloans payable.
(Net assets)
Net assets at the end of the third quarter of this consolidated fiscal year stood at 74,970 million yen, up 4,384 million yen fromthe end of the previous consolidated fiscal year. This was mainly due to an increase in retained earnings.
As a result, the equity ratio was 31.8%, an increase of 2.6 points from the end of the previous consolidated fiscal year.

(3) Explanation of Forecasts of Consolidated Results and Other Forward-Looking Information
Despite favorable business performance in the first nine months of this consolidated fiscal year and expectations for the effects
of initiatives including the resumption of nationwide tourism-support measures in the fourth quarter of this consolidated fiscal
year, we have left unchanged our forecasts of consolidated financial results for the fiscal year ending March 31, 2023, whichwere previously announced on November 9, 2022. Reasons include the anticipated cost of opening new facilities and repair costs
likely to arise in preparing for future recovery in business results and resumed growth, as well as expected increases in costs of
raw materials and energy. Any necessary future revisions to forecasts of financial results will be promptly disclosed.

62. Quarterly Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Real estate for sale
Real estate for sale in process
Costs on uncompleted construction contracts
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible fixed assets
Investments and other assets
Investment securities
Guarantee deposits
Lease deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

7

As of December 31, 2022

37,942
11,856
7,681
7,719
61
7,769
-76
72,953

26,94915,18011,789
6,406
68
8,636
-88
68,94147,03739,35913,173
3,648
103,218
3,384

47,20039,785
8,915
4,392
100,294
4,300

3,151
18,826
19,033
20,771-122
61,660168,264505
241,723

3,412
18,566
19,702
20,440-125
61,995
166,590429
235,962

(Unit: million yen)
As of March 31, 2022

As of December 31, 2022

Liabilities
Current liabilities
Notes and accounts payable - trade

6,202

6,154

Short-term borrowings

14,82015,232Current portion of bonds payable

5,080

4,980

Income taxes payable

1,035

655

Provision for bonuses

979

1,118

Provision for directors’ bonuses

76

213

Provision for warranties for completed construction

5

1

Other

21,234

16,509Total current liabilities

49,43344,864

Bonds payable

23,46020,620Convertible bonds with share acquisition rights

30,11230,090Long-term loans payable

61,961

59,409254

255

Retirement benefit liability

1,013

1,104

Other

4,902

4,647

Non-current liabilities

Provision for directors’ retirement benefits

Total non-current liabilities
Total liabilities

121,703

116,126

171,137

160,991

Net assets
Shareholders’ equity
Share capital

7,964

7,964

Capital surplus

12,821

12,862Retained earnings

50,38353,747

Treasury shares

-361

-349

70,80774,226

82

104

Deferred gains or losses on hedges

225

1,188

Foreign currency translation adjustment

-583

-594

Remeasurements of defined benefit plans

53

45

-221

744

70,58674,970241,723

235,962

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets8(2) Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Income Statement)(Nine Months Ended December 31, 2022)(Unit: million yen)
Nine Months Ended
December 31, 2021
(From April 1, 2021
to December 31, 2021)

Nine Months Ended
December 31, 2022
(From April 1, 2022
to December 31, 2022)

Net sales

105,066

129,131

Cost of sales

95,537104,130

Gross profit

9,529

25,001

Selling, general and administrative expenses

14,783

18,176

Operating profit (loss)-5,253

6,825

82

81

Non-operating income
Interest income
Dividend income

43

67

Subsidy income

474

170

Other

720

218

1,320

538

Interest expenses

442

434

Expenses for measures for COVID-19

158

85

Other

337

268

Total non-operating expenses

938

788

-4,871

6,575

Gain on sales of investment securities−

18

Total extraordinary income−

18

Loss on store closings

153

75

Loss on disaster

Total non-operating income
Non-operating expenses

Ordinary income (loss)
Extraordinary income

Extraordinary losses
52

61

Demolition and removal costs

−

110

Other

14

−

Total extraordinary losses

220

247

Net income (loss) before taxes-5,092

6,345

Income taxes-1,161

2,201

Net income (loss)-3,9304,143

Net income (loss) attributable to owners of parent-3,9304,1439

(Quarterly Consolidated Statement of Comprehensive Income)(Nine Months Ended December 31, 2022)(Unit: million yen)
Nine Months Ended
December 31, 2021
(From April 1, 2021
to December 31, 2021)
Net income (loss)

Nine Months Ended
December 31, 2022
(From April 1, 2022
to December 31, 2022)-3,930

4,143

21

21

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges−

963

Foreign currency translation adjustment

-16

-10

Remeasurements of defined benefit plans-3-7

Total other comprehensive income

1966-3,9295,110-3,9295,110

Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparent10

(3) Notes on Quarterly Consolidated Financial Statements(Notes on the going concern assumption)
Not applicable(Notes concerning any notable changes in shareholders’ equity)
Not applicable(Application of special accounting procedures in the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company calculates tax expenses by rationally assuming an effective tax rate after applying tax effect accounting to profit(loss) before income taxes for the consolidated fiscal year, including the third quarter of the fiscal year, and multiplying profit(loss) before income taxes for the first nine months of the fiscal year by the estimated effective tax rate. However, if the resultof calculation of tax expenses using the estimated effective tax rate is significantly unreasonable, the statutory effective tax rateis used.

(Changes in accounting policies)(Application of accounting standards for calculation of fair value, etc.)
Since the beginning of the first quarter of this consolidated fiscal year, the Company has applied the Implementation Guidanceon Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, June 17, 2021). The Company will continue toapply the new accounting policy prescribed in the Implementation Guidance on Accounting Standard for Fair Value
Measurement in accordance with the transitional treatment set forth in Paragraph 27-2 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement. This change will not have any impact on the quarterly consolidated financial
statements.

(Additional information)(Application of handling of account processing and disclosure when applying the Group Tax Sharing System)
The Company and some of its domestic consolidated subsidiaries have transitioned from the Consolidated Taxation System to
the Group Tax Sharing System since the first quarter of this consolidated fiscal year. Accordingly, account processing anddisclosure for tax effect accounting for national and local income taxes will be carried out in accordance with the Practical
Solution on the Accounting and Disclosure Under the Group Tax Sharing System (ASBJ Practical Solution No. 42, August 12,2021). In addition, the change in accounting policies accompanying the application of Practical Solution No. 42 is deemed tohave no effect, pursuant to Paragraph 32 (1) of Practical Solution No. 42.

11

(Segment Information etc.)[Segment Information]
I For the nine months ended December 31, 2021 (April 1, 2021 – December 31, 2021)
1. Information on net sales, income or loss by each reporting segment
Reporting segment

Dormitory

Hotel

Comprehensive
Building
Management

Other
Food
Service

Development

Total

Note 1

Total(Unit: million yen)Amountrecorded on
Adjustment consolidated
amountquarterly
Note 2incomestatement
Note 3

Net sales
Net sales to externalcustomers

33,781

46,157

5,523

583

8,031

94,078

10,988105,066–

105,066

Inter-segmental sales
or transfers

240

75

4,894

4,565

1,527

11,302353

11,656-11,656–

Total

34,022

46,232

10,417

5,149

9,558

105,381

11,342

116,723-11,656

105,066

Segment profit(loss)

2,997-7,296

109

-40

648

-3,580358-3,221-2,031-5,253

Notes: 1. The Other segment consists of the following businesses which are not included in the reporting segments: the SeniorLife Business (management and operation of senior residences), the Public Kyoritsu Partnership (PKP) Business(services provided under contract to local governments), support business for people who live alone, the insurance
agency business, comprehensive human-resource services, the financial business, the administrative outsourcing
business, and other additional businesses.
2. Adjustment of segment profit (loss) of -2,031 million yen includes the amount of elimination of inter-segment
transactions of 47 million yen and corporate expenses of -2,078 million yen that are not allocated to each reportablesegment. Corporate expenses mainly consist of expenses related to the Accounting Department and otheradministrative departments of the head office.
3. Segment profit (loss) is adjusted with operating loss on the quarterly consolidated statement of income.
2. Information on impairment loss on non-current assets or goodwill, etc. by reporting segment
Not applicable12II For the nine months ended December 31, 2022 (April 1, 2022 – December 31, 2022)
1. Information on net sales, income or loss by each reporting segment
Reporting segment

Dormitory

Hotel

Comprehensive
Building
Management

Other
Food
Service

Development

Total

Total

Note 1(Unit: million yen)Amountrecorded on
Adjustment consolidated
amountquarterly
Note 2incomestatement
Note 3

Net sales
Net sales to externalcustomers

36,45674,529

5,604

947

369

117,907

11,223

129,131–

129,131

Inter-segmental sales
or transfers

249

94

6,756

6,044

567

13,713464

14,177-14,177–

Total

36,706

74,624

12,361

6,992

936

131,620

11,688143,309-14,177

129,131

Segment profit(loss)

2,835

5,870

222

177

97

9,204

70

9,274

-2,4496,825

Notes: 1. The Other segment consists of the following businesses which are not included in the reporting segments: the SeniorLife Business (management and operation of senior residences), the Public Kyoritsu Partnership (PKP) Business(services provided under contract to local governments), support business for people who live alone, the insurance
agency business, comprehensive human-resource services, the financial business, the administrative outsourcing
business, and other additional businesses.
2. Adjustment of segment profit (loss) of -2,449 million yen includes the amount of elimination of inter-segment
transactions of 105 million yen and corporate expenses of -2,554 million yen that are not allocated to each reportablesegment. Corporate expenses mainly consist of expenses related to the Accounting Department and otheradministrative departments of the head office.
3. Segment profit (loss) is adjusted with operating profit on the quarterly consolidated statement of income.
2. Information on impairment loss of non-current assets or goodwill, etc. by reporting segment
Not applicable13