Living Platform : Consolidated Financial Results for Q1 FY2023

Living Platform, Ltd. Consolidated Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023

This document has been translated from the Japanese original text for reference purposes only. Should there be any inconsistency between the translation and the Japanese original text, the latter shall prevail.

August 12, 2022

Consolidated Financial Results

for the First Quarter of Fiscal Year Ending March 31, 2023

(Japanese GAAP)

Company name:	Living Platform, Ltd.
Listing exchange:	Tokyo Stock Exchange
Securities code:	7091
URL:	https://living-platform.com
Representative:	Hirofumi Kaneko, CEO
Inquiries:	Yuuki Nakarai, Administration Manager
Phone:	[phone]

Scheduled date for filing quarterly securities report:	August 12, 2022
Scheduled date for commencing dividend payment:	-
Supplementary materials on quarterly financial results:	No
Quarterly financial results briefing session:	No

(Amounts are rounded down to the nearest million yen, unless otherwise noted)

1. Consolidated Financial Results for the First Quarter (April 1, 2022 - June 30, 2022) of Fiscal Year Ending March 31, 2022

(1) Consolidated operating results (cumulative)

(% figures show the rate of increase (decrease) compared with the same period of the previous fiscal year)

		Net sales		Operating profit	Ordinary profit		Profit attributable to
				owners of parent
	First quarter ended	Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen		%
	June 30, 2022	3,338		27.5	116	2.6	53		-	72		-
	June 30, 2021	2,618		26.7	113	-	418		-	256		-
	Note: Comprehensive income
	First quarter of fiscal year ending March 31, 2023:	75 million yen [-%]
	First quarter of fiscal year ended March 31, 2022:	256 million yen [-%]
		Basic earnings per share	Diluted earnings per
		share
	First quarter ended			Yen		Yen
	June 30, 2022			16.32		16.13
	June 30, 2021			57.13		-

Note 1: The basis for calculation of basic earnings per share is as follows.

Note 2: The Company conducted a three-for-one stock split of its common shares as of October 1, 2021. In accordance with this, basic earnings per share and diluted earnings per share are calculated on the assumption that the stock split was conducted at the beginning of the previous fiscal year.

(2) Consolidated financial position

		Total assets	Net assets	Equity ratio
As of		Millions of yen	Millions of yen	%
June 30, 2022			10,500	1,427	13.6
March 31, 2022		10,866	1,346	12.4
Reference: Total shareholders' equity
	As of June 30, 2022:	1,423 million yen
	As of March 31, 2022:	1,346 million yen

Living Platform, Ltd. Consolidated Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023

2. Dividends

		Annual dividends per share
	End of first	End of second	End of third	Fiscal year-end	Total
	quarter	quarter	quarter
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended	-	-	-	-	-
March 31, 2022
Fiscal year ending	-
March 31, 2023
Fiscal year ending
March 31, 2023		-	-	-	-
(Forecast)

Note: Revisions to the most recently announced dividend forecast: No

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(% figures show the rate of increase (decrease) compared with the previous fiscal year)

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Basic earnings
				owners of parent		per share
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen
Full year	13,951	-	595		-	262		-	261		-	59.00

Note: Revisions to the most recently announced dividend forecast: No

Notes:

1. Changes in significant subsidiaries during the quarter (changes in specified subsidiaries resulting in change in scope of consolidation): No
   Newly consolidated: No
   Excluded from consolidation: No
2. Application of special accounting methods for preparing consolidated quarterly financial statements: No
3. Changes in accounting policies, changes in accounting estimates, and restatement
4. 1. Changes in accounting policies due to revisions to accounting standards, etc.: No
   2. Changes in accounting policies other than those in [1]: No
   3. Changes in accounting estimates: No
   4. Restatement: No

Note: For details, refer to "2. Consolidated Quarterly Financial Statements and Significant Notes Thereto; (3) Notes to Consolidated Quarterly Financial Statements; (Changes in Accounting Policies)" on page 8 of the Attachment.

1. Number of shares issued and outstanding (common shares)
2. 1. Number of shares issued and outstanding (including treasury shares) at end of fiscal year

As of June 30, 2022	4,489,500 shares
As of March 31, 2022	4,489,500 shares
[2] Number of treasury shares at end of fiscal year
As of June 30, 2022	43,136 shares
As of March 31, 2022	43,136 shares
[3] Average number of shares outstanding during quarter
First quarter ended June 30, 2022	4,446,364 shares
First quarter ended June 30, 2021	4,488,000 shares

• This report on consolidated quarterly financial results is not subject to audit procedures by a public accountant or audit corporation
• Explanation regarding appropriate use of earnings forecasts, and other notes (Notes on forward-looking statements)
  The earnings outlook and other forward-looking statements contained in this document are based on information currently available to and certain assumptions that are thought to be reasonable by the Company. Accordingly, such statements should not be construed as a guarantee of achieving the results by the Company. Actual operating results, etc. may differ materially due to various factors. For the conditions forming the assumptions on which earnings forecasts are based and explanatory notes for use of earnings forecasts, etc., please refer to "Explanations on Earnings Forecast and Other Forecast Information" on page 3 of the Attachment.
  (Other notes)
  The supplementary materials on the first quarter financial results will be posted on the Company's at an appropriate time.

Living Platform, Ltd. Consolidated Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023
Contents of Attachment
1. Qualitative Information on the Financial Results ..................................................................................................................................	2
(1)	Overview of Operating Results .....................................................................................................................................................	2
(2)	Financial Position..........................................................................................................................................................................	3
(3)	Explanations on Earnings Forecast and Other Forecast Information ............................................................................................	3
2. Consolidated Quarterly Financial Statements and Significant Notes Thereto .......................................................................................	4
(1)	Consolidated Balance Sheets ........................................................................................................................................................	4
(2)	Consolidated Statement of Income and Consolidated Statement of Comprehensive Income Consolidated Statements of
	Income (Cumulative) ....................................................................................................................................................................	6
(3)	Notes to Consolidated Quarterly Financial Statements .................................................................................................................	8
(Notes on Going Concern Assumption)............................................................................................................................................	8
(Notes When There Are Significant Changes in Amounts of Equity)...............................................................................................	8
(Changes in Accounting Policies).....................................................................................................................................................	8
(Additional Information) ..................................................................................................................................................................	8
(Segment Information, Etc.) .............................................................................................................................................................	8
(Revenue Recognition).....................................................................................................................................................................	8
(Significant Subsequent Events).......................................................................................................................................................	9

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Living Platform, Ltd. Consolidated Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023

1. Qualitative Information on the Financial Results

1. Overview of Operating Results

In the first quarter of the fiscal year ending March 2023, the Japanese economy showed a pickup trend with progress made in vaccinations against COVID-19. The outlook remains uncertain, however, as to how the increase in COVID-19 variants and other factors will affect the society and the economy.

The Living Platform Group (the "Group"), which had prepared emergency management manuals and conducted countermeasures against such infectious diseases as influenza and norovirus even before the latest pandemic, is working to further reinforce its anti-infection measures in the face of the recent nationwide spread of COVID-19, and will continue its endeavors to prevent expansion of the pandemic going forward.

As for the environment surrounding the Group, the nursing care business, its mainstay operations, is in a situation where the elderly population ratio (the ratio of the population aged 65 and above to the total population) continues to rise, reaching 28.8% in 2020. It is widely understood that by 2025, when the baby boomers will be 75 or above, Japan will have to face the "super-aging society." As such, there is a pressing need to reconstruct the entire social security system including medical care, nursing care and pension systems. The needs for nursing care services are expanding against the backdrop of the declining birthrate and aging population progressing, while it has become management issues to cope with the increasingly serious problem of labor shortage as well as to secure and foster nursing care workers.

Under such circumstances, the Group opened three new facilities in the first quarter under review. Consequently, the Group posted net sales of 3,338,854 thousand yen (up 27.5%), operating profit of 116,197 thousand yen (up 2.6%) and ordinary profit of 53,387 thousand yen (down 87.2%), all on a year-on-year basis. Profit attributable to owners of parent was 72,545 thousand yen, down 71.7% year on year, for the quarter.

The following are the situations by business domain.

In the nursing care business, the Company newly opened one facility (residential care facility) in the first quarter. As of the end of the quarter, the occupancy rate stood at 83.5% for residential care facilities, etc. (Note 1) (89.4% for facilities that opened a year or more ago) and 93.4% for group homes (also 93.4% for facilities that opened a year or more ago). The occupancy rate is regaining its stride as recovery is underway from the impact of the spread of COVID-19 along with progress made in vaccinations among the users and the staff of the facilities operated by the Group, except for some of its high-priced facilities.

The Group's nursing care business focuses on conducting facility care services for which it is easier to secure staff and command a high profit margin. In particular, the Group has promoted business operations centering on residential care facilities, serviced care residences and group homes. High priorities are placed on residential nursing care facilities and group homes that require administrative approvals. Meanwhile, taking into consideration the status of public invitation for applications for such approvals at municipalities and the supply and demand conditions, the Group will also expand operations with the business model of adding visiting home care and nursing services to assisted living residences and serviced care residences.

Note 1: Includes residential nursing care facilities, assisted living residences, serviced care residences and short-term admission for daily life care.

In the disabilities support business, the Company newly opened one facility (group home) in the first quarter. As of the end of the quarter, the occupancy rate stood at 58.5% for type B working support facilities (70.7% for facilities that opened a year or more ago) and 81.9% for group homes, etc. (Note 2) (95.9% for facilities that opened a year or more ago). The occupancy rate is regaining its stride as recovery is underway from the impact of the spread of COVID-19.

In conducting the disabilities support business, the Group gives emphasis on establishing a total support system for those with disabilities to live an independent life. The Group not only conducts a variety of employment training services through daily living training and the government's continuous employment support programs, but also provides group homes, etc. as residences for people aiming to live an independent life, and works to expand their employment at the Group's facilities in such areas as nursing care, childcare and food services. By doing so, the Group intends to help the users to be active as an important workforce of the society.

Note 2: Includes group homes and welfare homes.

In the childcare business, the Company newly opened one facility (approved childcare facility) in the first quarter. As of the end of the quarter, the occupancy rate stood at 77.7% for approved childcare facilities (82.7% for facilities that opened a year or more ago) and 48.6% for private in-house childcare facilities (also 48.6% for facilities that opened a year or more ago). The impact of the spread of COVID-19 has been immaterial for approved childcare facilities, but private in-house childcare facilities remain affected by the pandemic.

As Japan sees the declining birthrate and aging population progressing, it is required to establish social infrastructures that facilitate childbirth of those who essentially want to give birth to children. In this context, solving the problem of children on waiting lists for childcare services remains to be a most important issue going forward. Moreover, revisions to the government's Childcare Guidelines now require nursery schools to provide not only care but also education. Attaching importance to the factor of "education," the Group works to deepen exchanges among multiple generations, promote inheritance of traditional culture and support children to foster their ability of getting through life, by way of coordination with its facilities for the elderly. At the same time, along with approved childcare facilities, etc., the Group intends to enhance its childcare services for sick and post-sick children, on which the government is also focusing, by utilizing the government-led private in-house childcare system.

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Living Platform, Ltd. Consolidated Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023

(2) Financial Position

Total assets at the end of the first quarter under review amounted to 10,500,473 thousand yen, a decrease of 365,795 thousand yen from the end of the previous fiscal year. This was mainly attributable to the decrease of 209,617 thousand yen in cash and deposits, 146,127 thousand yen in buildings and structures and 71,096 thousand yen in land, against the increase of 59,246 thousand yen in prepaid expenses and 74,820 thousand yen in construction in progress.

Total liabilities at the end of the first quarter under review amounted to 9,072,485 thousand yen, a decrease of 447,286 thousand yen from the end of the previous fiscal year. This was mainly attributable to the decrease of 373,660 thousand yen in long-term borrowings and 175,637 thousand yen in income taxes payable, against the increase of 48,470 thousand yen in accrued expenses and 64,600 thousand yen in provision for bonuses.

Total net assets at the end of the first quarter under review amounted to 1,427,987 thousand yen, an increase of 81,490 thousand yen from the end of the previous fiscal year. This was mainly attributable to the increase of 467,590 thousand yen in retained earnings, against the decrease of 393,253 thousand yen in capital surplus.

(3) Explanations on Earnings Forecast and Other Forecast Information

In the nursing care business, the Group's mainstay operations, establishment of nursing care facilities is actively promoted in expectation of continued expansion of needs for nursing care services due to a rise in the elderly population ratio. The Group will also endeavor to expand its disabilities support business and childcare business, as the business environment allows anticipation for strong needs to continue.

The earnings outlook and other forward-looking statements are based on information currently available to and certain assumptions that are thought to be reasonable by the Company. Accordingly, such statements should not be construed as a guarantee of achieving the results by the Company. Actual financial results and the like may differ materially due to various factors.

Furthermore, the Company will promptly disclose when revisions to earnings forecasts are required due to changes in the impact on the economy in accordance with the spread of COVID-19, etc. going forward.

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