Global Kids : Consolidated Financial Results for the Fiscal Year Ended September 30, 2021

3. Consolidated Earnings Forecast for the Fiscal Year Ending September 30, 2022

*Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Changes in accounting policies and accounting-based estimates, and restatements
3. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
4. Number of shares issued (common stock)
5. 1. Number of shares issued as of the end of the period (including treasury shares)

2) Number of treasury shares as of the end of the period

3) Average number of shares issued during the period

• The current financial report is not subject to audit by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts and other special items
  Forecasts and other forward-looking statements in these materials are based on assumptions judged to be valid and information available to the Company's management at the time these materials were prepared, but are not promises by the Company regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons.
  Please refer to the section "1. Overview of Results of Operations, (4) Future Outlook" on page 4 of the attachments for details on the above forecasts.

Global Kids Company Corp. (6189) Consolidated Financial Results for the Second Quarter of FY9/21

Contents of Attachments

1

Global Kids Company Corp. (6189) Consolidated Financial Results for the Second Quarter of FY9/21

1. Overview of Results of Operations

(1) Results of Operations

(Results of operations for the fiscal year ended September 30, 2021)

In Japan, dealing with the declining workforce due to the low birthrate and aging population has become an issue of the utmost urgency, and the significance of the child-rearing business is growing year by year, as an infrastructure to support the social advancement and active participation of women who are expected to boost the country's economic vitality.

To reduce the number of wait-listed children at nursery schools, both the central and local governments are implementing measures that aim to expand service capacity by securing childcare workers and developing nursery schools. Specifically, free early childhood education and preschool programs began in October 2019, and in December 2020, the government announced the New Child-rearing Security Plan, setting a goal of securing additional capacity for approximately 140,000 children over the four years from fiscal 2021 to the end of fiscal 2024.

While the number of wait-listed children is decreasing, thanks to these initiatives taken by the government, the situation is still far from the government's goal of zero wait-listed children. The demand for establishing new nursery schools is expected to continue to a certain extent to achieve the goal of expanding service capacity under the government's New Child-rearing Security Plan. Furthermore, in an effort to unify its measures regarding children, the government is aiming to establish a "Children's Affairs Agency" that raises the concept of "Children First." The establishment of the Children's Affairs Agency is expected to raise the percentage of childcare-related expenditures against GDP to the latter 3% levels, comparable to European countries, and to improve the compensation and social standing of childcare workers, and the stance of promoting children-centric policies on a national scale has become increasingly marked.

Under such circumstances, the Group opened ten central government licensed nursery schools during the period under review as a result of our continued efforts to develop new facilities in Tokyo, Kanagawa and Chiba.

Consequently, at the end of the current fiscal year, the Group operates a total of 184 facilities: 135 central government licensed nursery schools (98 in Tokyo, 27 in Kanagawa, four in Chiba, one in Saitama and five in Osaka); 22 local government licensed nursery schools or centers for early childhood education and care; 11 employer-sponsored nurseries; 12 after-school day care centers or children's houses; and four child developmental support facilities.

(Central government licensed nursery schools) Tokyo

Global Kids Ikegami Global Kids Kamata No. 2 Global Kids Magome

Global Kids Morishita 5-Chome Global Kids Hirano

Global Kids Shimo No. 2

Global Kids Tachiaigawa Kanagawa

Global Kids Mitsukyo

Global Kids Hiyoshi 5-Chome

Chiba

Global Kids Urayasu

Net sales for the current fiscal year increased attributable to a rise in the number of nursery school children due to the opening of ten new central government licensed nursery schools mainly in Tokyo as part of our strategy to expand our business foundations and the rising occupancy rates of relatively new nursery schools mainly in the second and third years after establishment, in addition to the gradual recovery from the temporary fall in occupancy rates as a result of the suspension of nursery admissions of mainly 0 to 1-year- olds due to the impact of the novel coronavirus infection. Cost of sales rose due to the increase in facility operation expenses including facility rent and personnel expenses reflecting the increase in the number of facilities, despite lower recruiting costs. Meanwhile, the selling, general and administrative expenses ratio improved thanks to the contributions made by the establishment of online internal events, training, and meetings and the resulting decrease in meeting and travel expenses, as well as the promotion of enhanced efficiency in hiring.

Consequently, the Group reported net sales for the current fiscal year of 23,529 million yen (up 6.2% year on year) with operating

2

Global Kids Company Corp. (6189) Consolidated Financial Results for the Second Quarter of FY9/21

profit of 576 million yen (up 20.6% year on year), ordinary profit of 1,148 million yen (up 25.3% year on year), and profit attributable to owners of parent of 481 million yen (up 10.0% year on year).

1. Financial Position Assets
   Total assets amounted to 18,110 million yen at the end of the current fiscal year, a decrease of 450 million yen from the end of the previous fiscal year.
   Current assets decreased 63 million yen to 4,130 million yen. This was mainly attributable to a decrease of 488 million yen in cash and deposits, despite increases of 370 million yen and 55 million yen in accounts receivable-other and prepaid expenses, respectively. Non-current assets decreased 387 million yen to 13,979 million yen. This was mainly attributable to a decrease of 306 million yen in property, plant and equipment due to depreciation and impairment loss, despite an acquisition of buildings and structures as well as machinery and equipment due to the opening of new nursery schools.

Liabilities

Total liabilities amounted to 9,452 million yen at the end of the current fiscal year, a decrease of 962 million yen from the end of the previous fiscal year.

Current liabilities decreased by 254 million yen to 3,212 million yen. This was mainly attributable to a decrease of 193 million yen in income taxes payable and a decrease of 41 million yen in advances received.

Non-current liabilities decreased 707 million yen to 6,239 million yen. This was mainly attributable to a decrease of 776 million yen in long-term loans payable.

Total interest-bearing debt decreased 814 million yen from the end of the previous fiscal year.

Net assets

Net assets amounted to 8,658 million yen at the end of the current fiscal year, an increase of 511 million yen from the end of the previous fiscal year. This was mainly attributable to an increase of 481 million yen in retained earnings as a result of the booking of profit attributable to owners of parent.

(3) Cash Flows

Cash and cash equivalents (hereinafter, "net cash") at the end of the current fiscal year decreased 488 million yen from the end of the previous fiscal year to 1,327 million yen with net cash provided by operating activities of 1,235 million yen, net cash used in investing activities of 907 million yen, and net cash used in financing activities of 816 million yen.

The cash flow components for the current fiscal year and the main factors for changes are described below.

Cash flows from operating activities

Net cash provided by operating activities amounted to 1,235 million yen, mainly due to recording of profit before income taxes of 815 million yen, an increase in net defined benefit liability of 107 million yen, an increase in provision for bonuses of 31 million yen and a cash inflow from other operating activities of 143 million yen.

Net cash provided decreased 764 million yen compared to the fiscal year ended September 30, 2020. This was mainly due to an increase in accounts receivable-other of 505 million yen and an increase in income taxes paid of 425 million yen, despite an increase in profit before income taxes of 41 million yen and an increase in prepaid expenses of 133 million yen.

Cash flows from investing activities

Net cash used in investing activities amounted to 907 million yen, mainly due to purchase of property, plant and equipment of 785 million yen and payments for lease and guarantee deposits of 136 million yen.

Net cash used in investing activities decreased 136 million yen compared to the fiscal year ended September 30, 2020. This was mainly due to a decrease in purchase of property, plant and equipment of 82 million yen and a decrease in the purchase of intangible assets of 71 million yen.

Cash flows from financing activities

Net cash used in financing activities amounted to 816 million yen, mainly due to repayments of long-term loans payable of 904 million yen, despite proceeds from long-term loans payable of 90 million yen.

Net cash used in financing activities increased by 197 million yen compared to the fiscal year ended September 30, 2020. This was

3

This is an excerpt of the original content. To continue reading it, access the original document here.