Serverworks : Consolidated Financial Results for the Nine Months Ended November 30, 2021

Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results

for the Nine Months Ended November 30, 2021

[Japanese GAAP]

Company name: Serverworks Co., Ltd.	January 14, 2022
Stock exchange listing: Tokyo
Code number: 4434
URL: https://www.serverworks.co.jp/
Representative: Ryo Oishi	Representative Director, President
Contact: Hiroyuki Oshio	Director

Phone: [phone]

Scheduled date of filing quarterly securities report: January 14, 2022

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes

(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Nine Months Ended November 30, 2021 (March 01, 2021 to November 30, 2021)

(1) Consolidated Operating Results						(% indicates changes from the previous corresponding period.)
		Net sales			Operating profit	Ordinary profit		Profit attributable to
					owners of parent
Nine months ended	Million yen		%		Million yen	%	Million yen	%		Million yen	%
November 30, 2021		7,772		-		525	-	549	-		383	-
November 30, 2020		-		-		-	-	-	-		-	-
(Note) Comprehensive income:	Nine months ended November 30, 2021:	¥		143 million	[	-%]
		Nine months ended November 30, 2020:	¥		- million	[	-%]
		Basic earnings			Diluted earnings per
		per share				share
Nine months ended				Yen			Yen
November 30, 2021				50.06			48.35
November 30, 2020				-			-
(2) Consolidated Financial Position
		Total assets			Net assets	Capital adequacy ratio
As of			Million yen			Million yen			%
November 30, 2021		11,350			9,126			79.8
February 28, 2021				-			-			-
(Reference) Equity: As of	November 30, 2021:			¥	9,058 million
As of	February 28, 2021:			¥		- million

2. Dividends

				Annual dividends
	1st	2nd		3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
	Yen		Yen	Yen		Yen	Yen
Fiscal year ended February 28, 2021	-		0.00	-		0.00	0.00
Fiscal year ending February 28, 2022	-		0.00	-
Fiscal year ending February 28, 2022						0.00	0.00
(Forecast)
(Note) Revision to the forecast for dividends	announced most	recently:	No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2022(March 01, 2021 to February 28, 2022)

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Basic earnings

owners of parent

per share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

10,212

-

420

-

443

-

319

-

41.79

(Note) Revision to the financial results forecast announced most recently:

No

* Notes:

(1) Changes in significant subsidiaries during the nine months ended November 30, 2021

(changes in specified subsidiaries resulting in changes in scope of consolidation):

No

(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:

Yes

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

November 30, 2021:	7,674,892	shares
February 28, 2021:	7,588,044	shares
2) Total number of treasury shares at the end of the period:
November 30, 2021:	372	shares
February 28, 2021:	340	shares

3) Average number of shares during the period:
Nine months ended November 30, 2021:	7,656,163	shares
Nine months ended November 30, 2020:	7,116,770	shares

Quarterly Consolidated Financial Statements

Quarterly Consolidated Balance Sheets

			(Thousand yen)
			As of November 30,2021
Assets
	Current assets
		Cash and deposits	6,829,168
		Notes and accounts receivable - trade	1,481,743
		Work in process	60,322
		Other	673,691
		Allowance for doubtful accounts	(1,817)
		Total current assets	9,043,108
	Non-current assets
		Property, plant and equipment	66,135
		Intangible assets	110,185
		Investments and other assets
		Investment securities	1,969,665
		Shares of subsidiaries and associates	83,449
		Other	78,117
		Total investments and other assets	2,131,232
		Total non-current assets	2,307,552
	Total assets	11,350,661
Liabilities
	Current liabilities
		Accounts payable - trade	1,164,692
		Income taxes payable	82,889
		Provision for bonuses	34,248
		Provision for loss on order received	4,762
		Other	697,900
		Total current liabilities	1,984,493
	Non-current liabilities
		Deferred tax liabilities	225,580
		Asset retirement obligations	14,310
		Total non-current liabilities	239,890
	Total liabilities	2,224,384
Net assets
	Shareholders' equity
		Share capital	3,214,220
		Capital surplus	3,204,945
		Retained earnings	2,003,243
		Treasury shares	(1,994)
		Total shareholders' equity	8,420,415
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	637,624
		securities
		Total accumulated other comprehensive income	637,624
	Non-controlling interests	68,236
	Total net assets	9,126,276
Total liabilities and net assets	11,350,661

Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income (For the nine months)

		(Thousand yen)
		For the nine months
		ended November 30,2021
Net sales	7,772,540
Cost of sales	6,471,951
Gross profit	1,300,588
Selling, general and administrative expenses	775,086
Operating profit	525,502
Non-operating income
	Dividend income	7,772
	Share of profit of entities accounted for using equity	5,665
	method
	Commission income	39,704
	Other	701
	Total non-operating income	53,843
Non-operating expenses
	Loss on investments in investment partnerships	18,909
	Foreign exchange losses	8,601
	Other	2,399
	Total non-operating expenses	29,910
Ordinary profit	549,434
Extraordinary losses
	Special executive bonuses	10,000
	Other	17
	Total extraordinary losses	10,017
Profit before income taxes	539,417
Total income taxes	162,226
Profit	377,191
Loss attributable to non-controlling interests	(6,038)
Profit attributable to owners of parent	383,229

Quarterly Consolidated Statements of Comprehensive Income (For the nine months)

	(Thousand yen)
	For the nine months
	ended November 30,2021
Profit	377,191
Other comprehensive income
Valuation difference on available-for-sale securities	(233,416)
Total other comprehensive income	(233,416)
Comprehensive income	143,774
Comprehensive income attributable to

	Comprehensive income attributable to owners of	149,812
	parent
	Comprehensive income attributable to non-controlling	(6,038)
	interests