Cresco : ［Delayed］Summary of Consolidated Financial Results for the Three Months Ended June 30, 2022 (Based on Japanese GAAP)

Translation

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 document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Three Months Ended June 30, 2022 (Based on Japanese GAAP)

					August 5, 2022
Company name:	CRESCO LTD.
Stock exchange listing:	Tokyo
Stock code:	4674	URL https://www.cresco.co.jp/
Representative:	President, Executive Officer	Hiroshi Tominaga
Inquiries:	Director, Senior Managing Executive Officer	Kazuo Sugiyama	TEL [phone]
Scheduled date to file Quarterly Securities Report:	August 8, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	No
Holding of quarterly financial results meeting:	Yes	(for analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)								Percentages indicate year-on-year changes
	Net sales				Operating profit	Ordinary profit		Profit attributable to
						owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen		%
Three months ended June 30, 2022	11,381		15.3		891	11.6		563	(36.2)		320		(54.4)
Three months ended June 30, 2021	9,870		5.0		799	87.4		883		4.2		702		26.5
	Earnings per share		Diluted earnings per share
			Yen					Yen
Three months ended June 30, 2022			15.24					-
Three months ended June 30, 2021			33.43					-
(2) Consolidated financial position
	Total assets				Net assets	Equity ratio
	Millions of yen			Millions of yen				%
As of June 30, 2022		31,443					21,872			69.6
As of March 31, 2022		33,136					22,134			66.8
2. Cash dividends
						Annual dividends per share
	1st quarter-end	2nd quarter-end		3rd quarter-end	Fiscal year-end	Total
	Yen				Yen			Yen			Yen			Yen
Year ended March 31, 2022		-			20.00			-			24.00			44.00
Year ending March 31, 2023		-
Year ending March 31, 2023 (Forecast)					23.00			-			23.00			46.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

Percentages indicate year-on-year changes

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Earnings
				owners of parent	per share
Six months ending	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen	%	Yen
22,840	8.4	2,090		3.6	2,340		5.2	1,420	(11.6)	67.49
September 30, 2022
Full year	47,500	6.9	4,750		6.6	5,150		7.7	3,350	3.5	159.22

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4. Notes

1. Changes in significant subsidiaries during the three months ended June 30, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation):
2. Application of special accounting methods for preparing quarterly consolidated financial statements:

No

No

(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
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
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 shares)

	As of June 30, 2022	23,000,000	shares	As of March 31, 2022	23,000,000	shares
Number of treasury shares at the end of the period
	As of June 30, 2022	1,959,492	shares	As of March 31, 2022	1,959,443	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Three months ended June 30, 2022	21,040,541	shares	Three months ended June 30, 2021	21,019,616	shares

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Quarterly consolidated financial statements

Quarterly consolidated balance sheets

			(Thousands of yen)
		As of March 31, 2022	As of June 30, 2022
Assets
Current assets
Cash and deposits	11,846,082	10,913,500
Notes and accounts receivable - trade, and contract assets	8,539,249	7,384,838
Electronically recorded monetary claims - operating	31,361	380,497
Securities	957,044	979,602
Money held in trust	73,436	73,572
Merchandise and finished goods	41,477	38,393
Work in process	202,280	420,716
Supplies	32,870	25,865
Other	463,193	749,211
Total current assets	22,186,996	20,966,198
Non-current assets
Property, plant and equipment	461,756	533,391
Intangible assets
Goodwill	1,528,539	1,475,721
Software	482,691	470,944
Other	14,163	14,121
Total intangible assets	2,025,393	1,960,787
Investments and other assets
Investment securities	6,466,936	6,034,189
Other	2,103,012	2,056,280
Allowance for doubtful accounts	(107,209)	(107,209)
Total investments and other assets	8,462,740	7,983,261
Total non-current assets	10,949,890	10,477,441
Total assets	33,136,886	31,443,639

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			(Thousands of yen)
		As of March 31, 2022	As of June 30, 2022
Liabilities
Current liabilities
Accounts payable - trade	2,112,464	2,143,721
Short-term borrowings	100,000	100,000
Current portion of long-term borrowings	639,175	570,010
Income taxes payable	936,448	67,251
Provision for bonuses	1,600,244	739,809
Provision for loss on orders received	6,377	4,494
Other	2,039,543	2,454,687
Total current liabilities	7,434,253	6,079,974
Non-current liabilities
Long-term borrowings	820,322	695,313
Long-term accounts payable - other	52,697	52,674
Retirement benefit liability	2,636,766	2,685,086
Asset retirement obligations	54,102	54,364
Other	4,621	3,846
Total non-current liabilities	3,568,510	3,491,285
Total liabilities	11,002,763	9,571,259
Net assets
Shareholders' equity
Share capital	2,514,875	2,514,875
Capital surplus	3,382,707	3,382,707
Retained earnings	16,765,589	16,581,337
Treasury shares	(2,184,556)	(2,184,658)
Total shareholders' equity	20,478,616	20,294,262
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	1,624,957	1,538,056
Foreign currency translation adjustment	11,511	21,605
Remeasurements of defined benefit plans	19,037	18,453
Total accumulated other comprehensive income	1,655,506	1,578,116
Total net assets	22,134,123	21,872,379
Total liabilities and net assets	33,136,886	31,443,639

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Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income Quarterly consolidated statements of income

			(Thousands of yen)
		Three months ended	Three months ended
		June 30, 2021	June 30, 2022
Net sales	9,870,582	11,381,180
Cost of sales	8,021,247	9,232,260
Gross profit	1,849,335	2,148,919
Selling, general and administrative expenses
Advertising expenses	10,475	16,806
Remuneration, salaries and allowances for directors (and	450,392	493,906
other officers)
Provision for bonuses	76,454	104,147
Retirement benefit expenses	13,716	14,902
Legal welfare expenses	69,133	82,734
Hiring expenses	47,208	59,807
Entertainment expenses	4,116	20,063
Rent expenses on land and buildings	39,354	42,667
Supplies expenses	26,820	20,339
Enterprise tax	45,693	40,231
Other	266,806	361,681
Total selling, general and administrative expenses	1,050,172	1,257,288
Operating profit	799,162	891,631
Non-operating income
Interest income	70,533	88,375
Dividend income	19,807	30,807
Gain on sale of securities	2,245	10,349
Gain on valuation of securities	-	964
Gain on investments in money held in trust	5,475	136
Subsidy income	11,256	9,946
Share of profit of entities accounted for using equity method	1,942	-
Other	6,184	42,099
Total non-operating income	117,445	182,678
Non-operating expenses
Interest expenses	1,271	1,156
Loss on valuation of derivatives	4,487	484,218
Foreign exchange losses	4,512	2,740
Investment advisory fees	22,155	22,305
Share of loss of entities accounted for using equity method	-	102
Other	740	529
Total non-operating expenses	33,167	511,053
Ordinary profit	883,439	563,256

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