TENPOS : Consolidated Financial Results for the Fiscal Year Ended April 30, 2022

June 14, 2022

Consolidated Financial Results

for the Fiscal Year Ended April 30, 2022 （Japan GAAP-Unaudited）

Company name:	Tenpos Holdings Co., Ltd.
Listed:	Tokyo Stock Exchange
Securities code:	2751
URL:	https://www.tenpos.co.jp
Representative:	Atsushi Morishita, President
Inquiries:	Kazumitsu Morishita, Manager, Management Department
Telephone:	[phone]

Scheduled date of the Ordinary General Meeting of Shareholders: July 27, 2022

Scheduled date to commence dividend payments: July 28,2022

Scheduled date of securities report submission: July 28,2022

Preparation of supplementary materials for financial results: Yes

Financial Results Briefing Session: Yes (for analysts and institutional investors)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated Financial Results for the Fiscal Year Ended April 30, 2022 (May 1, 2021 - April 30, 2022)

(1) Consolidated operating results		(Percentages indicate over the same period of the previous year changes.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Year ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	April 30, 2022	29,008		7.4	1,871	90.6	2,919	101.5	1,564	686.1
	April 30, 2021	27,014		(7.4)	982	(42.9)	1,448	(23.9)	199	(79.2)

Note: Comprehensive profit	Year ended April 30, 2022: ¥1,601 million[-%] Year ended April 30, 2021: (¥578 million) [-%]
		Basic earnings	Diluted earnings	Shareholders' equity	Total assets	Net Sales
		Ratio of net income to	Ordinary Income	Operating income
			per share	per share
			shareholders's equity	Ratio	ratio
	Year ended		Yen	Yen	%	%	%
	April 30, 2022		131.59	130.12	14.9	16.3	6.5
	April 30, 2021		16.74	16.57	1.9	8.7	3.6

Reference: Equity in earnings(losses) of affiliates Year Ended April 30, 2022:¥154 million Year Ended April 30, 2021:¥96 million

(2) Consolidated financial position

		Total assets	Net assets	Equity-to-asset ratio	Net assets per share
	Year ended	Millions of yen	Millions of yen	%
	April 30, 2022	18,826	12,883	61.1	965,12
	April 30, 2021	16,902	11,168	58.4	832.08
Reference: Equity	Year Ended April 30, 2022:¥11,499 million Year Ended April 30, 2021:¥9,884 million
(3) Consolidated Cash flows
		Cash flows from	Investing Activities	Financing Activities	Cash and cash
		operating activities	equivalents Cash and
		Cash flows from	Cash flows from
		Cash flows from	cash equivalents at end of
		investing activities	financing activities
		operating activities	period
	Year ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
	April 30, 2022	2,310	(188)	(377)	10,432
	April 30, 2021	1,470	(126)	372	8,701

2. Dividends

			Annual dividends per share			Dividend	Net Assets
						Total	payout ratio	Dividend
	First	Second	Third	Fiscal year-	Total	dividends	(consolidat	ratio
	quarter-end	quarter-end	quarter-end	end	(total)	ed)	(consolidat
								ed)
	Yen	Yen	Yen	Yen	Yen	Millions of	%	%
	yen
Fiscal year ended	-	0.00	-	8.00	8.00	95	47,7	0.8
April 30, 2021
Fiscal year ending	-	0.00	-	10.00	10.00	119	7.6	1.0
April 30, 2022
Fiscal year ending
April 30, 2022	-	0.00	-	11.00	11.00		-
(Forecast)

Note: Revisions to divided forecasts published most recently: None

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending April 30, 2023 (May 1, 2022 - April 30, 2023)

	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		%	yen
Second half of
the fourth period	16,263		16.2	1,447	91.9	1,545	3.9	916		1.7	77.10
( Cumulative)
Fiscal Year	33,880		16.8	3,015	61.1	3,219	10.2	1,909		21.8	160.62
* Notes
(1) Changes in important subsidiaries during the current quarterly consolidated cumulative period	: None
(Changes in specified subsidiaries due to changes in the scope of consolidation)
New company (company name), excluded company (company name)
(2) Changes in accounting policies, changes in accounting estimates, and restatements of revisions
1.Changes in accounting policies due to revisions to accounting standards, etc.	: Yes
2.Changes in accounting policies other than 1.						: None
3.Change of accounting estimate							: Yes
4.Restatement of corrections								: None
(3) Number of issued shares (common stock)

1. Number of issued shares at the end of the period (including treasury stock)
2. Number of treasury stock at the end of the period
3. Average number of shares during the period (cumulative quarterly)

			14,314,800
Year ended April 30, 2022	14,314,800 shares	April 2021
			shares
			2,435,949
Year ended April 30, 2022	2,400,132 shares	April 2021
			shares
			11890,621
Year ended April 30, 2022	11,888,882 shares	April 2021
			shares

• Quarterly financial statements are not subject to quarterly reviews by certified accountants or audit corporations.
• Explanation on proper use of earnings forecasts and other special notes

The statements regarding the future, such as the business outlook, described in this material are based on the information currently available to the Company and certain assumptions that are judged to be reasonable, The actual business performance could differ due to various factors. In use of earnings forecasts, refer to 1. Business Results, 4 ) Outlook for the future on page 8 of the attached document for precautions regarding the use of earnings forecasts.

Accompanying Materials - Contents

1. Overview of Business Results………………………………………………………………………………………. 2

1. Summary of Business Results for the Current Period…………………………………………………………. 2

(2) Details of Financial Position……………………………………………………………………………………	9
(3) Details of Cash Flows……………………………………………………………………. ……………………	9

1. Information on the Future Outlook, Including Consolidated Business Results Forecasts……………………. 9

2. Basic approach to the selection of accounting standards …………………………………………………………… 10

3. Consolidated Financial Statements and Key Notes ………………………………………………………………… 11

1. Consolidated Balance Sheets ………………………………………………………………………………….. 11
2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ….………….... 13
3. Consolidated Statement of Changes in Net Assets ……………………………………………………………. 15
4. Consolidated Statement of Cash Flows………………………………………………………………………... 16
5. Notes to Consolidated Financial Statements ………………………………………………………………….. 18

(Notes on Going Concern Assumption) ……………………………………………………………………….	18
(Notes in the event significant change in shareholders' equity) ………………………………………………	18
(Notes on Changes in Presentation Methods)..………………………………………………………………..	18
(Changes in Accounting Estimates ……………………………………………………………………………	19
(Segment Information, etc) ……………………………………………………………………………………	19
(Per sharre information) ……………………………………………………………………………………	23

(Significant subsequent events) ………………………………………………………………………………. 23

1

1. Overview of Business Results, etc.

(1) Summary of Business Results for the Current Period

In the domestic economy, the performance of the restaurant industry has changed rapidly from favorable to unfavorable due to the infection situation of the new type of coronavirus, but after the lifting of the priority measures to prevent the spread of the virus in March 2022, the number of customers has gradually recovered.

The Group, which sells kitchen appliances to restaurants and provides restaurant management support and restaurant management, reported consolidated net sales of 29,008 million yen (up 7.4% year-on-year), operating income of 1,871 million yen (up 90.6% year-on-year), ordinary income of 2,919 million yen (up 101.5% year-on-year), and net income attributable to owners of the parent of the Company of Net income attributable to shareholders of the parent company was 1,564 million yen (up 686.1% y-o-y), marking a record high for ordinary income for the year. The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others were applied from the beginning of the first quarter of the current consolidated fiscal year. As a result, net sales, cost of sales, and selling, general and administrative expenses decreased by 429 million yen, 237 million yen, and 191 million yen, respectively, during the current consolidated accounting period, but there was no impact on operating income, ordinary income, and income before income taxes and minority interests.

Operating profit					(Unit: million yen)
	Previous consolidated fiscal year	Current Consolidated
	Fiscal Year May 1,
Segment name	From: May 1, 2020	Difference	Growth Rate
2021	From: April 30,
	To: April 30, 2021
	2010 To: April 30, 2011
Product sales business	1,854		2,373	519	28.0%
Information and service	(69)		132	201	Returning to profit
business
Food service business	(723)		(541)	181	Deficit Improvement
total	1,061		1,963	902	85.0%

(note) The above are non-consolidated segment results and do not correspond to the results in the segment information and consolidated statements of income.

Ordinary Income					(Unit: million yen)
	Previous consolidated fiscal year	Current Consolidated
	Fiscal Year May 1,
Segment name	From: May 1, 2020	difference	Growth Rate
2021	From: April 30,
	To: April 30, 2021
	2010 To: April 30, 2011
Product sales business	1,960		2,544	583			29.8%
Information and service	(7)		165	172	Returning	to	profit
business
Food service business	(425)		301	727	Returning	to	profit
total	1,527		3,011	1,483			97.1%

(Note) The above figures are the results of the segment on a non-consolidated basis and do not correspond to the results of the segment information.

A summary by business segment is as follows.

Sales by business segment, which until the previous consolidated fiscal year had been stated in terms of sales to outside customers, are stated in terms of segment sales from the first quarter of the consolidated fiscal year under review.

1.Product sales

Due to an increase in orders from customers opening new restaurants and replacement demand for kitchen equipment using subsidies, segment sales for the full year were 21,003 million yen (up 16.1% y-o-y) and segment income was 2,373 million yen (up 28.0% y-o-y), reaching record high results.

[Store Sales of used kitchen equipment, etc. Tenpos Busters Co., Ltd.]

2

Sales: 16,106 million yen (+19.4% YoY) Operating income: 2,127 million yen (+24.8% YoY)

Tempos Busters Co., Ltd. is Japan's largest seller of used kitchen equipment, and is working to attract new restaurant openings and increase customer spend by offering "Dr. Tempos," an information and service useful for restaurant management in addition to product sales. Tempos Busters is working to acquire customers opening new restaurants and increase the number of customers per customer by providing "Dr. Tempos," a service that not only sells products but also provides useful information and services for restaurant management. The number of new restaurant opening customers for the full year totaled 24,303, up 15.5% from the same period last year and up 36.4% from the same period last year before the Corona disaster. This is due to the thoroughness of our approach to customer calls to capture customers who visit our stores. As a result, sales focused on customers opening new stores increased 16.1% y-o-y to 6,104 million yen.

On the other hand, as a measure to increase the sales per customer for new restaurant openings, we are working on comprehensive order-taking activities for product sales triggered by DIY work for restaurants, but it takes time to acquire the quality of sales talk and knowledge, and customers do not believe that Tempo is supporting the opening of new restaurants because of the employees' appearance and rough clothes. We have yet to achieve any significant results. Employees who used to be just customer service staff are now struggling, but we will continue to do so because we see this market as a large one. In addition, starting in March 2022, when a restaurant closes and we receive a request to purchase the equipment, we will not immediately pull the equipment after purchasing it, but negotiate with the landlord to leave the equipment as is and sell the kitchen equipment to the next customer who opens a new restaurant. The new customers purchase only the kitchen equipment they want to use, and Tempos Busters will continue to salvage and recondition unneeded equipment and sell it at Tempos Busters' stores. This allows us to have contact with customers from the early stage of preparation for opening a new restaurant, when restaurants sign real estate contracts, and we intend to link this to interior work necessary for opening, support for hiring and attracting customers, and proposal and sale of missing equipment, furniture, and tableware and cooking utensils. Although you may be frustrated by our company's inability to harvest the various business seeds we have sown, we will continue to take various steps toward our long-term vision of "becoming an unshakable provider of hardware and software to the restaurant industry.

Finally, with regard to new store openings, we opened a store in Ibaragi Prefecture (Mito Store) in February 2022 and in Hyogo Prefecture (Himeji City) in March. The Mito store was profitable in the month it opened, and the Himeji store was profitable in the month following its opening. The reason for the low number of new store openings over the past 10 years was that it was difficult to turn a profit even after opening new stores. However, we are now experimenting with the "Dr. Tempos" method of serving customers in stores to increase the number of times customers are served and sell products, and we feel that this method will work for new stores as well, and it has become a foothold for our store opening offensive.

[Direct sales of kitchen appliance to major food service companies KITCHEN TECHNO CORPORATION] Sales: 2,973 million yen (+11.3% YoY) Operating income: 219 million yen (+20.7% YoY)

As a result of the attention paid to ventilation inside restaurants in the Corona Disaster, unit sales of our own product, "Smokeless Yakiniku Roaster Tetsujin 29 (Niku) Go," increased 108.0% year on year. Other factors such as a 37.0% year-on-year increase in unit sales of our own product "noodle-making machines" and a 23.7% year-on- year increase in unit sales of used and new ticket-vending machines resulted in a 20.7% year-on-year increase in full-year operating income, mainly due to higher unit sales of products with high gross margins. We feel that there is still a strong appetite for investment in labor-saving products in the food and beverage industry, which is experiencing a labor shortage, so we believe that there are still elements of growth potential.

As for new initiatives, in the fourth quarter of the fiscal year, we started sales activities for take-out counters for major restaurant chains and a project to support the opening of restaurants for foreign residents visiting Japan.

[Sales of kitchen appliances and food products for consumers through web-based shopping TENPOS.COM Co., Ltd.]

Sales: 2,545 million yen (-0.2% YoY) Operating income: 89 million yen (-6.8% YoY)

Tempos.com Co., Ltd. operates Japan's largest mail-order kitchen equipment website, and unlike Tempos Busters, which sells in stores, the majority of its sales come from the sale of new kitchen equipment. Therefore, a major blow to the company came when domestic kitchen equipment manufacturers suspended orders and extended delivery dates due to the global shortage of semiconductors and damage to material manufacturers beginning in the fall of 2021. However, "A pinch is an opportunity!" and focused on expanding sales and proposing alternatives to used kitchen equipment, sales in the used equipment segment increased 9.4% year-on-year in the first half of the year, while in the second half of the year sales grew a significant 40.8%. As a result, despite the problem of shortages of new equipment, full-year sales declined only 0.2% from the same period of the previous year, resulting in sales of 2,854 million yen, up 12.0% from the same period of the previous year when the accounting standards of the previous period were applied.

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