Bushiroad : Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year 2022 (Consolidated)

FOR TRANSLATION PURPOSE ONLY

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes.

In the event of any discrepancy between this translated version and the original Japanese version, the latter shall prevail.

November 12, 2021

Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year 2022 [Japanese standards] (Consolidated)

Company name:	Bushiroad Inc.
Stock exchange listing:	Tokyo
Securities code:	7803	URL:	https://bushiroad.co.jp/
Representative:	President and COO	Yoshitaka Hashimoto
Inquiries:	Director and General Manager of Business Administration

Toshiyuki Muraoka

TEL: [phone]

Scheduled date to file Quarterly Securities Report:

November 12, 2021

Scheduled date to commence dividend payments:

N/A

Preparation of supplementary material on financial results: Yes

Holding of financial results meeting:

Yes

(Amounts less than one million yen are rounded down)

1. Consolidated financial results of the first quarter of FY2022 (July 1, 2021 - September 30, 2021)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes)

Net sales

Operating profit

Ordinary profit

Net profit attributable to

owners of parent

million yen

%

million yen

%

million yen

%

million yen

%

1Q of FY2022

10,484

−

1,321

−

1,669

−

1,136

−

1Q of FY2021

8,971

8.0

−82

−

−93

−

−154

−

(Note) Comprehensive income

1Q of FY2022:

1,083 million yen [−%]

1Q of FY2021: −142 million yen [−%]

Net profit per share

Diluted net profit per share

yen

yen

1Q of FY2022

35.27

32.67

1Q of FY2021

−4.79

−

(Notes) 1. The Company has since FY2021 changed its fiscal year end from July 31 to June 30, and unified the whole Group's fiscal year end as June 30. With this change, the previous and current first quarter fiscal periods were different: previous period was from August 1, 2020 to October 31, 2020, and current period was from July1, 2021 to September 30, 2021. Therefore, year-on-year increase/decrease (%) are not given.

1. 2. The Company carried out share splitting to split one share into two shares, on October 1, 2021. Net profit per share and diluted net profit per share are calculated assuming that such share splitting was carried out at the beginning of the previous consolidated fiscal year.

2. Consolidated financial position

Total assets

Net assets

Equity ratio

million yen

million yen

%

1Q of FY2022

38,444

13,477

33.4

FY2021

37,515

13,894

35.3

(Reference) Shareholders equity

1Q of FY2022:

12,851 million yen

FY2021:

13,241 million yen

2. Cash dividends

Annual dividends per share

1Q-end

2Q-end

3Q-end

Year-end

Total

yen

yen

yen

yen

yen

FY2021

－

0.00

－

0.00

0.00

FY2022

－

FY2022 (forecasts)

0.00

0.00

0.00

(Note) Revisions to dividend forecasts published most recently: No

The Company has since FY2021 (previous term) changed its fiscal year end from July 31 to June 30. Therefore, for FY2021 being a transitional period, the Company set its record dates of interim dividend and year-end dividend as January 31 and June 30, respectively.

FOR TRANSLATION PURPOSE ONLY

3. Consolidated performance forecasts for FY2022 (July 1, 2021 - June 30, 2022)

(Percentages indicate year-on-year increase/decrease)

Net sales

Operating profit

Ordinary profit

Net profit attributable to

Profit per share

owners of parent

million yen

%

million yen

%

million yen

%

million yen

%

yen

Full-term

38,700

－

2,200

－

3,100

－

2,200

－

68.27

(Notes) 1. Revisions to performance forecasts published most recently: Yes

For details on the revision to the consolidated performance forecasts, please refer to "Notices concerning consolidated performance forecasts for the full term of fiscal year" announced today (November 12, 2021).

1. The Company has since FY2021 changed its fiscal year end from July 31 to June 30, and unified the whole Group's fiscal year end as June 30. The previous consolidated fiscal year was a transitional period for changing fiscal year end, and its term was irregularly 11 months from August 1, 2020 to June 30, 2021. Therefore, year-on-year increase/decrease (%) are not given.
2. The Company carried out share splitting to split one share into two shares, on October 1, 2021. Forecast of net profit per share for FY2022 was calculated taking effects of such share splitting into account.

*Notes

(1) Changes in significant subsidiaries during the current quarter consolidated cumulative period
(changes in specified subsidiaries resulting in the change in scope of consolidation):	No
(2) Application of special accounting methods to the preparation of quarterly consolidated financial statement:	Yes

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

• Changes in accounting policies due to revisions to accounting standards and other regulations: Yes

②	Changes in accounting policies due to other reasons:	No
③	Changes in accounting estimates:	No
④	Restatement of prior period financial statements:	No

(4) Number of issued shares (common shares)

• Total number of issued shares at the end of the period (including treasury stock)

1Q of FY2022:

33,116,800 shares

FY2021:

33,038,800 shares

• Number of treasury stock at the end of the period

1Q of FY2022:

983,852 shares

FY2021:

361,052 shares

• Average number of shares during the period (quarterly cumulative)

1Q of FY2022:

32,227,014 shares

1Q of FY2021:

32,288,182 shares

(Note) The Company carried out share splitting to split one share into two shares, on October 1, 2021. "Total number of issued shares at the end of the period", "Number of treasury stock at the end of the period", and "Average number of shares during the period" were calculated assuming that such share splitting had been carried out at the beginning of the previous consolidated fiscal year.

• Quarterly summary of financial results is not included in a quarterly review by a certified public accountant or an auditing firm.
• Explanation regarding appropriate use of the earnings forecast and other special notes
  Descriptions about the future such as performance forecasts contained in this document are based on information currently available to the Company and certain presumptions considered as reasonable, and those are not intended to indicate the Company should assure that it would realize such forecasts. Meanwhile, actual performance in the future may differ substantially, influenced by a wide variety of factors.
  (How to obtain materials for quarterly financial results briefing)
  Video streaming will be provided on the Company's website (scheduled on November 15, 2021, Monday, after 15:30 (JST)).

FOR TRANSLATION PURPOSE ONLY	Bushiroad Inc. (7803)
	Summary of Consolidated Financial Results for the First Quarter of FY2022

• Table of Contents: Appendix

1. Qualitative Information regarding the Current Quarter.......................................................................................................	2
(1)	Descriptions regarding operating results........................................................................................................................	2
(2)	Descriptions regarding financial position ......................................................................................................................	3
(3)	Descriptions regarding future prospects such as consolidated performance forecasts...................................................	3
2. Quarterly Consolidated Financial Statements and Principal Notes .....................................................................................	4
(1)	Quarterly Consolidated Balance Sheets .........................................................................................................................	4
(2)	Quarterly Consolidated Statements of Income and Statements of Comprehensive Income ..........................................	6
	Quarterly Consolidated Statements of Income
	For the first quarter consolidated cumulative period.................................................................................................	6
	Quarterly Consolidated Statements of Comprehensive Income
	For the first quarter consolidated cumulative period.................................................................................................	7
(3)	Notes on Quarterly Consolidated Financial Statements.................................................................................................	8
	(Going Concern Assumption)........................................................................................................................................	8
	(Notes in Case of Significant Changes in the Amount of Shareholders' Equity) ..........................................................	8
	(Application of Special Accounting Methods to the Preparation of Quarterly Consolidated Financial Statements) ...................	8
	(Change in Accounting Principles)................................................................................................................................	8
	(Segment Information, etc.) ..........................................................................................................................................	9
	(Per share data)...........................................................................................................................................................	11
	(Significant Post-Balance Sheet Events) .....................................................................................................................	12

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FOR TRANSLATION PURPOSE ONLY	Bushiroad Inc. (7803)
	Summary of Consolidated Financial Results for the First Quarter of FY2022

1. Qualitative Information regarding the Current Quarter

(1) Descriptions regarding operating results

It should be noted that descriptions concerning the future in the text are based on judgement of the Company as of the end of the current quarter consolidated fiscal period.

"Partial amendments to the articles of incorporation" was approved at the 14th regular shareholders meeting on October 27, 2020. So the Company has changed its fiscal year end from July 31 to June 30, and unified the whole Group's fiscal year end as June 30. With this change, the previous and current first quarter consolidated fiscal/cumulative periods were different: previous period was from August 1, 2020 to October 31, 2020, and current period was from July1, 2021 to September 30, 2021. Therefore, year-on-year comparison of operating results is omitted.

During the current first quarter consolidated cumulative period, Japanese economy has still been in a tough situation due affected by COVID-19, but taking measures against widespread of infections and facilitating vaccination, as well as considering the effects of various political measures and improved economy overseas, it is expected that economic climate would come out of the slump.

Amid such an environment, despite ongoing restrictions on holding real events and gathering guests, the Group is moving toward the future after the pandemic, including several occasions of large-scale music live shows. In addition, "IP Developer " strategy was updated, and efforts were put into enhancement of product services which would contribute to higher value of IPs including Weiss Schwarz, as a platform for utilizing IPs.

As a result, operating results of the current first quarter cumulative period were as follows: Net sales of 10,484,829,000 yen; Operating profit of 1,321,247,000 yen; Ordinary profit of 1,669,558,000 yen; and Net profit attributable to owners of parent of 1,136,537,000 yen.

Operating results of individual business segments are as follows. Meanwhile, segmental net sales include sales to external customers.

1. Digital IP business

Digital IP business segment has four departments: TCG (Trading Card Games) Dept., Games Dept., MD (Merchandising) Dept., and Media Dept. Former MOG (Mobile Online Games) Dept. has been renamed to Games Dept. since the current first quarter consolidated fiscal period.

• TCG Dept.

With respect to "Weiss Schwarz", the main TCG, "Hololive Production" registered record-high sales in the history of Weiss Schwarz, and other products also showed successful results.

"CARDFIGHT!! VANGUARD", specifically the new series "CARDFIGHT!! VANGUARD overDress" maintained high level of movement especially overseas.

As for "Rebirth for you", "New Japan Pro-Wrestling" version was released, approaching pro-wrestling fans taking advantage of a synergy within the Group.

As a result, TCG Dept. registered record-high sales in terms of quarterly performance.

• Games Dept.

On September 16, 2021, "BanG Dream! Girls Band Party! for Nintendo Switch" was released, which enabled Bushiroad to enter into the field of console games on a full scale. In addition, mobile online games market has been in a state of overheated competition, so overall sales of this Dept. got softened.

• MD Dept.

The Company has succeeded its MD/EC business to Bushiroad Creative Co., Ltd., one of its subsidiaries, by means of absorption-type split since the current first quarter consolidated fiscal period. In line with this, functions/resources within the Group should be aggregated and thus MD Dept. aims at further business expansion.

MD Dept. as a whole could maintain high level of performance around capsule toys and general distribution. Also, sales from OEM and events for external IPs such as "Genshin" and "Hololive Production" registered record-high, resulting in record-high quarterly sales in this Dept.

• Media Dept.

Full 3D CG animation movie "[White Snake] Japanese-dubbed version" jointly produced by Chinese and American productions was premiered on July 30, 2021, whose distribution/production was conducted by Bushiroad Move Co., Ltd. jointly with TEAM JOY CO., LTD., and this movie was ranked at the 10th place during the first week after release among the nationwide attendance ranking surveyed by Kogyo Tsushinsha.

Moreover, live stage of "Girls☆Musical Revue Starlight -TheLIVE-#3 Growth" started on July 27, 2021, and the committee's revenues thereof and other sales led to record-high quarterly sales in Media Dept.

These operations resulted in Net sales of 8,035,202,000 yen and Segment profit of 1,353,567,000 yen.

2

FOR TRANSLATION PURPOSE ONLY

Bushiroad Inc. (7803)

Summary of Consolidated Financial Results for the First Quarter of FY2022

2. Live IP business

Live IP business segment has two departments: Music Dept. and Sports Dept.

• Music Dept.

Bushiroad Music Co., Ltd. held large-scale live shows of BanG Dream! 9th☆LIVE "The Beginning" and "Mythology" at Fuji-Q Highland Conifer Forest, and also overall sales of music/visual software showed good results, and additionally Hikosen Theater Company tended to gather its audience attendance, which led to record-high quarterly sales in this Dept.

• Sports Dept.

Although "New Japan Pro-Wrestling" held a large-scale event "CARDFIGHT!! VANGUARD overDress Presents WRESTLE GRAND SLAM in MetLife Dome" at Tokyo Dome and MetLife Dome, number of spectators was restricted due to extended State of Emergency Declaration, and therefore sales of the event and related goods could not grow very much. However, sales of contents such as video streaming service of "New Japan Pro-Wrestling World" and application of "NJPW Collection" maintained steady growth.

"STARDOM" has increased events held at larger venues in a step-by-step manner, resulting in record-high quarterly sales in Bushiroad Fight Co., Ltd.

These operations resulted in Net sales of 2,449,627,000 yen and Segment loss of 40,188,000 yen.

1. Descriptions regarding financial position (Assets)

Total assets was 38,444,141,000 yen at the end of the current first quarter consolidated fiscal period, i.e. increase by 928,792,000 yen as compared to the end of the previous consolidated fiscal year. This is mainly due to decrease in cash and deposits by 842,813,000 yen on one hand, and increase in accounts receivable - trade by 1,581,521,000 yen on the other.

(Liabilities)

Total liabilities was 24,966,792,000 yen at the end of the current first quarter consolidated fiscal period, i.e. increase by 1,345,926,000 yen as compared to the end of the previous consolidated fiscal year. This is mainly due to decrease in current portion of long-term loans payable by 75,610,000 yen and decrease in long-term loans payable by 1,020,536,000 yen on one hand, and increase in accounts payable - trade by 850,703,000 yen on the other.

(Net assets)

Net assets was 13,477,348,000 yen at the end of the current first quarter consolidated fiscal period, i.e. decrease by 417,133,000 yen as compared to the end of the previous consolidated fiscal year. This is mainly due to increase in retained earnings by 1,136,537,000 yen on one hand, and increase in treasury stock by 878,640,000 yen because of purchase of treasury stock and decrease in retained earnings at the beginning of the current period by 656,758,000 yen because of applying the Accounting Standard for Revenue Recognition, etc., on the other.

(3) Descriptions regarding future prospects such as consolidated performance forecasts

During the current first quarter, Digital IP business segment especially TCG Dept. and MD Dept. with high profit rates showed successful results which led to their record-high quarterly sales, and additionally, due to adequate control over SG&A expenses mainly advertising expenses, progression rates of net sales and operating profit against the full-term consolidated performance forecasts (hereinafter, "progression rates against forecasts") as of the end of the first quarter cumulative period were 28.5% and 101.6%, respectively. Moreover, despite continued restrictions on the number of audience attendance at events held by Live IP business segment, subsidies of J-LODlive and others amounting to 306 million yen could be obtained, and by recording these as non-operating profit, progression rates of ordinary profit and net profit attributable to owners of parent against forecasts were 128.4% and 162.2%, respectively. Thus these profits have significantly exceeded the forecasts.

For the second quarter and onward as well, it is expected that TCG Dept. and MD Dept., including overseas, would show successful results, and also control over SG&A expenses such as advertising expenses shall be sustained. In the Live IP business segment, both Music Dept. and Sports Dept. expect increased attendance by holding large-scale events several times, but in a situation of remaining uncertainty about the suppression of COVID-19, profits from large-scale events have to be estimated conservatively for both Depts. In addition, with respect to subsidies of J-LODlive and others which were not included in the performance forecasts since it had been difficult to forecast at the beginning of the period whether they could be obtained or not and amounts thereof, it was decided, considering the amount actually obtained during the first quarter, to expect 600,000,000 yen, which equals to 80% of the adopted balance, as non-operating profit.

Considering the above, consolidated performance forecasts for FY2022 are upwardly revised as follows: Net sales of 38,700,000,000 yen; Operating profit of 2,200,000,000 yen; Ordinary profit of 3,100,000,000 yen; and Net profit attributable to owners of parent of 2,200,000,000 yen.

(Note)	Performance forecasts are based on currently available information. Actual performance may differ from these
	forecasts due to various factors in the future.

3