TAC : Consolidated Financial Results for the Nine Months Ended December 31, 2022

TAC Co.,Ltd Consolidated Financial Results for the Nine Months Ended December 31, 2022

Consolidated Financial Results

for the Nine Months Ended December 31, 2022

February 6 , 2023

Company name: TAC Co., Ltd.

Listing: Tokyo Stock Exchange

Company code number: 4319

URL: https://www.tac-school.co.jp

Representative: Toshio Tada, Representative Director

Contact: Shoji Nonaka, Manager of IR department Tel: [phone]

Scheduled date to commence dividend payments: -

Scheduled date to submit the annual securities report of the 3rd quarter: February 10, 2023

Supplemental information for financial statements: Yes

Results briefing session: No

(Amounts rounded down to the nearest million yen)

1. Consolidated 3rd quarter results for the fiscal year ending March 2023

(From April 1, 2022 to December 31, 2022)

(1) Consolidated financial results

(% indicates changes from the previous corresponding period)

Net sales

Operating profit

Ordinary profit

Profit attributable

to owners of parent

(Yen in millions)

％

(Yen in millions)

％

(Yen in millions)

％

(Yen in millions)

％

FY2022

14,949

-4.2

341

-48.8

352

-50.3

204

-55.3

(Apr.1,2022 - Dec.31,2022)

FY2021

15,599

6.2

666

22.9

709

1.2

456

-4.5

(Apr.1,2021 - Dec.31,2021)

(Notes)Comprehensive income:FY2022(2022/12) 189 million yen (-61.1%)

FY2021(2021/12) 487 million yen (-1.3%)

Profit per share

Fully diluted profit

per share

(Yen)

(Yen)

FY2022

11.07

－

(Apr.1,2022 - Dec.31,2022)

FY2021

24.65

－

(Apr.1,2021 - Dec.31,2021)

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

(Yen in millions)

(Yen in millions)

％

FY2022

21,260

6,177

29.0

(As of Dec. 31,2022)

FY2021

21,384

6,174

28.8

(As of Mar. 31,2022)

（Notes）EquityFY2022(2022/12)

6,168 million yen

FY2021(2022/3)

6,165 million yen

2．Dividends

Annual dividends per share

1stquarter

2ndquarter

3rdquarter

4thquarter

Total

FY2021

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

(Apr.1,2021 - Mar.31,2022)

－

3.00

－

3.00

6.00

FY2022

－

3.00

－

(Apr.1,2022 - Mar.31,2023)

FY2022(Forecast)

3.00

6.00

(Note) Revision of dividend forecasts in the current quarter: None

3．Consolidated forecasts for March 2023 term (From April 1, 2022 to March 31,2023)

(% indicates changes from the previous corresponding period)

	Net sales		Operating profit	Ordinary profit	Profit attributable	Profit per share
		to owners of parent
	(Yen in millions)	％	(Yen in millions)	％	(Yen in millions)	％	(Yen in millions)	％	(Yen)
Full year	20,450	-0.1	650	57.3	608	37.4	400	-10.1	21.62

(Note) Revision of consolidated financial results forecasts: None

1

TAC Co.,Ltd Consolidated Financial Results for the Nine Months Ended December 31, 2022

• Notes
• 1. Significant changes in scope of consolidation (Changes in consolidated subsidiaries): None
  2. Application of the simplified accounting method and/or the special accounting method for quarterly consolidated financial statements: None
  3. Changes in accounting policies, changes in accounting estimates, and restatements

(3)-1 Changes in accounting policies due to the revision of accounting standards: Yes

(3)-2 Changes in accounting policies other than (3)-1: None

(3)-3 Changes in accounting estimates: None

(3)-4 Restatements: None

(4) Number of shares issued (common stocks)

(4)-1 Number of shares issued at the end of the period (including treasury shares)

(4)-2 Number of treasury shares at the end of the period

(4)-3 Average number of shares during the period

FY2022	18,504,000	shares	FY2021	18,504,000	shares
3rdquarter
FY2022	370,168	shares	FY2021	68	shares
3rdquarter
FY2022	18,442,024	shares	FY2021	18,503,932	shares
3rdquarter	3rdquarter

• This "Consolidated Financial Results" are outside the scope of the audit.
• Explanation of proper use of financial forecasts and other special notes:

The above forecasts are based on the information available at this time and on assumptions deemed to be reasonable. Therefore, the actual financial results may differ significantly from the forcasts due to various factors.

2

TAC Co.,Ltd Consolidated Financial Results for the Nine Months Ended December 31, 2022

(Table of contents of appendix)

1. Qualitative information on quarterly financial results
2. 1. Overview of operating results
   2. Overview of financial position
3. Quarterly consolidated financial statements and notes
4. 1. Quarterly consolidated balance sheet
   2. Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income
   3. Notes for quarterly consolidated financial statements

(Going-Concern Assumption)

(Notes on significant changes in the amount of shareholders' equity) (Changes in accounting policy)

(Segment information) (Revenue recognition)

3

TAC Co.,Ltd Consolidated Financial Results for the Nine Months Ended December 31, 2022

1．Qualitative information on quarterly financial results

1. Overview of operating results

1. Overview of 3rd quarter

In the business of supporting acquisition of license qualifications, tuition fees are paid by the student upon application for a particular course. This constitutes net sales on a cash basis. Upon payment, the entire amount of tuition received is credited to advances received (liability) and reduced to recognize net sales on an accrual basis in the relevant accounting periods in which the service is provided to the student. While net sales recorded in the income statement are net sales on an accrual basis, for business management purposes we attach great importance to growth in net sales on a cash basis.

In the current period, net sales on a cash basis decreased 5.2%, or by ¥804 million, year on year to ¥14,729 million. Net sales on an accrual basis after adjustment of advances received decreased 4.2%, or by ¥650 million to ¥14,949 million.

Cost of sales decreased 4.2%, or by ¥399 million year on year to ¥9,093 million. Selling, general and administrative expenses increased 1.4%, or by ¥74 million year on year to ¥5,514 million. In total, operating profit for the current period decreased 48.8%, or by ¥324 million year on year to ¥341 million.

Non-operating income of ¥44 million was recorded, including insurance claim income of ¥25 million and interest income of ¥6 million. Non-operating expenses of ¥33 million were posted including interest expenses of ¥25 million. As a result, ordinary profit decreased 50.3%, or by ¥356 million year on year to ¥352 million.

In the current period, impairment loss of ¥8 million and loss on valuation of investments in capital of subsidiaries and associates of ¥6 million were posted as extraordinary losses. As a result, profit decreased 55.1%, or by ¥252 million year on year to ¥205 million and profit attributable to owners of parent decreased 55.3%, or by ¥252 million year on year to ¥204 million.

Quarterly results of TAC Group are as shown below. Net sales before adjustment of advances received represent net sales totaling the amount paid upon registration. Net sales after adjustment of advances received represent net sales after allocating the amount paid upon registration to corresponding periods in accordance with provision of educational services.

License examinations covered by our educational courses have some notable features including (i) examinations of Certified Public Accountant and Certified Public Tax Accountant, our flagship, implemented from spring to autumn (1st to 3rd quarters) and (ii) registration to Public Officer courses, whose main clients are university students, concentrating in spring to summer (1st to 2nd quarters). Accordingly, registration for educational courses in the 4th quarter (net sales before adjustment of advances received) tends to be weaker compared to other quarters. Meanwhile, operating expenses including rent expenses, instructors' fees and advertising costs are allocated evenly to each month, causing no variance in quarterly results.

4

TAC Co.,Ltd Consolidated Financial Results for the Nine Months Ended December 31, 2022

Changes in fiscal operating results between this year and last year:

FY2021	1stquarter		2ndquarter			3rdquarter			4thquarter		Total for FY2021
(Apr.2021-Mar.2022)	(April - June)	(July-September)	(October-December)	(January-March)	(Apr.2021-Mar.2022)
			%		Y-O-Y		%		Y-O-Y				%			Y-O-Y		%		Y-O-Y		%	Y-O-Y
		Yen in			%	Yen in			%		Yen in					%		Yen in			%	Yen in		%
Net sales (before	millions				millions					millions							millions				millions
5,049			121.9	5,947			103.3	4,536					92.8	4,612			91.8	20,146		101.7
adjustment of
tuition advances)
Adjustment of	687			71.4	-528			－	-92					－	259			867.0	325		－
tuition advances
Net sales (after	5,736	28.0		112.4	5,419	26.5		107.5	4,443		22.5		97.7	4,872	23.8		96.4	20,471	100.0	103.7
adjustment of tuition
advances)
Gross profit		2,475	43.2		109.3	2,282	42.1		103.6	1,348		30.3		90.8	1,707	35.1		96.4	7,814	38.2	101.2
Operating profit	622	10.9		121.4	488	9.0		123.7	-445		-10.0		－	-252	-5.2		－	413	2.0	102.2
Ordinary profit	628	11.0		122.5	525	9.7		95.8	-445		-10.0		－	-266	-5.5		－	442	2.2	68.5
Profit attributable to	432	7.5		123.6	342	6.3		89.4	-319		-7.2		－	-11	-0.2		－	444	2.2	109.7
owners of parent
Net profit per share	Yen				Yen					Yen							Yen				Yen
23.38				18.53					-17.26							-0.60				24.05
(Notes)	1．Percentage of quarterly net sales stated as a proportion of total net sales.
	2．Other percentages stated as a proportion of quarterly net sales.
FY2022	1stquarter		2ndquarter			3rdquarter
(Apr.2022-Mar.2023)	(April - June)	(July-September)		(October-December)
			%		Y-O-Y		%		Y-O-Y					%			Y-O-Y
		Yen in			%	Yen in			%		Yen in					%
Net sales before	millions				millions					millions
adjustment of	4,739			93.9	5,680			95.5		4,309						95.0
tuition advances
Adjustment of	836			121.7	-493			－		-122						－
tuition advances
Net sales (after										4,186						94.2
adjustment of tuition	5,575	－		97.2	5,186	－		95.7				－
advances)
Gross profit		2,431	43.6		98.2	2,212	42.7		96.9		1,212			29.0			89.9
Operating profit	549	9.9		88.3	391	7.6		80.2		-600			-14.3			－
Ordinary profit	534	9.6		85.0	390	7.5		74.2		-572			-13.7			－
Profit attributable to	351	6.3		81.2	263	5.1		76.8		-410			-9.8			－
owners of parent
Net profit per share	Yen				Yen					Yen
18.98				14.24					-22.42
(Notes)	1．Percentage of quarterly net sales stated as a proportion of total net sales.
	2．Other percentages stated as a proportion of quarterly net sales.

(B) Segment-related information

Operating performance (net sales on a cash basis) and an overview of each segment of TAC group in the current period is as shown below. With regards to segment information, TAC introduced a management approach by adopting "Accounting Standards for the Disclosure of Segment Information". Accordingly, sales data are presented in the following tables as "net sales on a cash basis before adjustment of advances received" so as to reflect management decision-making of TAC group in a more appropriate manner. Please note that net sales on a cash basis are different from net sales shown on the consolidated quarterly income statement. For details, please refer to "Segment information" on page 17.

Segment information		3rdquarter of FY2021			3rdquarter of FY2022
	Percentage	Y-O-Y			Percentage		Y-O-Y
	Yen in millions	%	%	Yen in millions	%	%
Personal Education	8,450	54.4	97.9	7,802		53.0		92.3
Corporate Training	3,392	21.8	108.5	3,404		23.1		100.4
Publishing	3,296	21.2	123.4	3,115		21.2		94.5
Manpower Business	434	2.8	107.9	445		3.0		102.4
Eliminations	-40	-0.2	―	-38		-0.3		―
Total	15,533	100.0	105.0	14,729		100.0		94.8
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