CRE : Summary of Consolidated Financial Statements for the First Three Quarters of the Fiscal Year ending July 31, 2021

June 11, 2021

CRE Inc.

Summary of Financial Statements (Unaudited)

For the First Three Quarters of the Fiscal Year ending July 31, 2021

(Translated from the Japanese original)

Corporate Information

Code: 3458 Listing: First Section of the Tokyo Stock Exchange (URL https://www.cre-jpn.com/english/)

Representative: Tadahide Kameyama, Representative Director, President

Contact: Hidetoshi Nagahama, Director

E-mail:[e-mail]

Anticipated date for filing Shihanki Hokokusho (a Japanese-language quarterly business report): June 14, 2021

Expected date of payment for dividends: ―

Preparation of supplementary explanation material for quarterly financial results: Yes

Presentation meeting for quarterly financial results: No

(Rounded down to the nearest million)

1. Consolidated Performance for the first three quarters of Fiscal 2021 (August 1, 2020 through April 30, 2021)

(1) Consolidated Operating Results (accumulated total)

(Percentages represent changes from corresponding period of previous year)

																		Net income attributable
				Net sales		Operating profit				Recurring profit	to owners of the parent
																				company
		Millions of	%	Millions of	%			Millions of		%				Millions of		%
			yen				yen						yen						yen
First three quarters of Fiscal 2021		40,933	132.4		6,074	416.2				5,825		444.7				4,144		421.6
First three quarters of Fiscal 2020		17,617	4.3		1,176	(9.8)				1,069		(5.1)				794		(0.5)
(Note) Comprehensive income: 4,222 million yen (322.4%) for the first three quarters of fiscal 2021
	999 million yen (17.7%) for the first three quarters of fiscal 2020
		Net income per share		Fully diluted net
			income per share
				Yen				Yen
First three quarters of Fiscal 2021				151.27				151.03
First three quarters of Fiscal 2020				31.57				31.47
(2) Consolidated Financial Position
			Total assets			Net assets				Equity ratio
		Millions of yen		Millions of yen			%
First three quarters of Fiscal 2021				77,556				26,843					34.6
Fiscal 2020				70,142				20,004					28.5
(Reference) Equity capital: 26,843 million yen for the first three quarters of fiscal 2021, 20,002 million yen for fiscal 2020
2. Payment of Dividends
								Dividends per share
	First quarter-end		At end of first half		Third quarter-end		Year-end			For the year
	yen				yen				yen					yen			yen
Fiscal 2020		―				0.00				―			22.00				22.00
Fiscal 2021		―				0.00				―
Fiscal 2021															23.00				23.00
(Estimated)
(Note) Change in the latest release of dividend forecast: None

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3. Anticipated Consolidated Results for Fiscal 2021 (August 1, 2020 through July 31, 2021)

(Percentages represent changes from corresponding period of previous year)

		Net sales			Operating profit			Recurring profit
		Millions of yen			%		Millions of yen		%		Millions of yen		%
Full year	46,100			11.9	5,000		18.2		4,500		11.1
		Net income attributable to owners		Net income per share
		of the parent company
		Millions of yen		%		Yen
Full year		2,900			11.0				105.97

(Note) Change in the latest release of consolidated results forecast: None

*Notes:

1. Changes in significant subsidiaries during this quarter: None
   (Changes in specified subsidiaries involving change in consolidation scope)
2. Adoption of accounting methods specific to quarterly consolidated financial statements: Yes
3. Changes in accounting policy, changes in accounting estimate and retrospective restatement 1. Changes associated with revision of accounting standards, etc: None
   2. Changes other than 1: None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of outstanding shares (common stock)

1. Number of outstanding shares, including treasury stock, at end of term: 27,468,800 shares at April 30, 2021
   26,309,200 shares at July 31, 2020
2. Number of shares of treasury stock at end of term:

4,011 shares at April 30, 2021

1,063,311 shares at July 31, 2020

3. Average outstanding number of shares (quarterly cumulative period): 27,397,745 shares at April 30, 2021

25,163,651 shares at April 30, 2020

*This quarterly financial report falls outside the quarterly review procedures.

*Information concerning proper use of forward-looking statements and other important matters

This report contains forward-looking statements about plans and expectations pertaining to CRE's business activities, based on information available to management at the time of preparation and on certain assumptions that management believes to be reasonable. These forward-looking statements are not guarantees of future performance, and actual results, performance, achievements and financial position may differ materially from statements expressed or implied herein due to various factors.

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Quarterly Consolidated Financial Statements
(1) Quarterly Consolidated Balance Sheets
	Fiscal 2020	Fiscal 2021
	As of July 31, 2020	As of April 30, 2021
	Thousands of yen	Thousands of yen
Assets
Current assets
Cash and deposits	14,466,126	12,644,289
Accounts receivable-trade	485,405	478,590
Notes receivable-trade and Accounts receivable from	143,033	209,732
completed construction contracts
Real estate for sale	20,395,781	23,327,532
Real estate for sale in process	8,715,918	7,082,726
Advance payments-trade	3,374,710	11,193,427
Prepaid expenses	1,055,477	1,328,420
Others	703,577	386,325
Allowance for doubtful accounts	(15,963)	(41,482)
Total current assets	49,324,066	56,609,561
Fixed assets
Tangible fixed assets
Buildings and structures	4,155,207	4,263,506
Accumulated depreciation	(1,927,543)	(2,016,476)
Buildings and structures (net)	2,227,664	2,247,029
Machinery, equipment and vehicles	417,449	416,481
Accumulated depreciation	(246,911)	(267,779)
Machinery, equipment and vehicles (net)	170,538	148,702
Tools, furniture and fixtures	147,500	168,762
Accumulated depreciation	(96,202)	(114,090)
Tools, furniture and fixtures (net)	51,297	54,671
Land	1,877,030	1,900,842
Lease assets	472,388	472,947
Accumulated depreciation	(251,183)	(271,459)
Lease assets (net)	221,205	201,488
Construction in progress	14,013	―
Total tangible fixed assets	4,561,749	4,552,734
Intangible fixed assets
Goodwill	1,296,836	1,119,648
Others	144,898	273,855
Total intangible assets	1,441,735	1,393,504
Investments and other fixed assets
Investment securities	7,210,680	7,204,705
Claims provable in bankruptcy, claims provable in	62,468	33,683
rehabilitation and other
Long-term prepaid expenses	1,245,391	1,100,627
Deferred tax assets	60,348	55,643
Lease and guarantee deposits	6,218,658	6,531,632
Others	83,564	82,441
Allowance for doubtful accounts	(65,718)	(36,933)
Total investments and other fixed assets	14,815,392	14,971,800
Total fixed assets	20,818,877	20,918,039
Deferred assets
Bond issuance cost	―	28,549
Total deferred assets	―	28,549
Total assets	70,142,943	77,556,150

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	Fiscal 2020	Fiscal 2021
	As of July 31, 2020	As of April 30, 2021
	Thousands of yen	Thousands of yen
Liabilities
Current liabilities
Accounts payable-trade	11,994,136	3,362,374
Accounts payable for construction contracts	135,032	203,654
Short-term loans payable	1,000,000	600,000
Current portion of long-term loans payable	9,752,331	2,032,911
Lease obligations	28,804	30,149
Accrued corporate and other taxes	1,377,803	1,143,884
Deposits received	1,484,492	1,478,583
Unearned revenue	1,620,977	1,775,115
Allowance for employees' bonuses	49,799	94,521
Allowance for directors' bonuses	250,000	―
Allowance for sublease losses	70,275	18,636
Asset retirement obligations	587	―
Others	274,689	226,921
Total current liabilities	28,038,929	10,966,751
Fixed liabilities
Bonds payable	―	3,000,000
Long-term loans payable	13,703,300	27,257,010
Lease obligations	286,955	264,508
Liability for retirement benefits	238,808	253,520
Allowance for loss on guarantees	30,661	32,038
Asset retirement obligations	253,361	267,588
Allowance for sublease losses	21,552	17,241
Lease and guarantee deposits received	7,115,073	7,652,597
Others	450,217	1,000,962
Total fixed liabilities	22,099,930	39,745,466
Total liabilities	50,138,860	50,712,218
Net assets
Shareholders' equity
Common stock	2,240,348	3,071,660
Capital surplus	3,612,271	5,031,293
Retained earnings	14,170,090	17,727,187
Treasury stock	(955,171)	(288)
Total shareholders' equity	19,067,539	25,829,852
Accumulated other comprehensive income
Unrealized gains (losses) on investment securities	1,070,359	1,077,885
Deferred gains (losses) on hedges	(30,919)	(30,018)
Foreign currency translation adjustment	(104,317)	(33,787)
Total accumulated other comprehensive income	935,122	1,014,079
Non-controlling interests
1,420	―
Total net assets	20,004,083	26,843,932
Total liabilities and net assets	70,142,943	77,556,150

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1. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income

	First Three Quarters of	First Three Quarters of
	Fiscal 2020	Fiscal 2021
	(August 1, 2019 through	(August 1, 2020 through
	April 30, 2020)	April 30, 2021)
	Thousands of yen	Thousands of yen
Net sales	17,617,115	40,933,940
Cost of sales	13,738,588	31,899,172
Gross profit	3,878,527	9,034,767
Selling, general and administrative expenses	2,701,758	2,959,891
Operating profit	1,176,768	6,074,875
Non-operating income
Interest received	3,425	2,685
Equity in income of affiliates	99,444	123,990
Penalty income	67,437	359
Others	12,151	25,086
Total non-operating income	182,458	152,122
Non-operating expenses
Interest paid	153,367	140,635
Commission fee	65,796	229,404
Removal expenses	60,000	―
Others	10,619	31,711
Total non-operating expenses	289,783	401,751
Recurring profit	1,069,442	5,825,247
Extraordinary income
Gain on sales of investment securities	162,460	148,988
Others	1	19,616
Total extraordinary income	162,461	168,604
Extraordinary expenses
Loss on retirement of fixed assets	1,474	136
Loss on change in equity	3,431	―
Total extraordinary expenses	4,905	136
Profit before dividend distribution from silent partnerships and	1,226,999	5,993,714
income taxes
Dividends distribution from silent partnerships	160	10,881
Income before income taxes	1,226,838	5,982,833
Total income taxes	466,763	1,838,368
Net income	760,075	4,144,465
Net income attributable to non-controlling interests	(34,448)	―
Net income attributable to owners of the parent company
794,524	4,144,465

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