Insource Co.,ltd.TSE: 6200

Q1 FY21 Consolidated Financial Results

Jan 24, 2022 at 8:13 AM UTC · Issued by Insource Co.,ltd.

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Japanese original for reference purposes only.

Q1 FY21 Consolidated Financial Results [JGAAP]

										January 24, 2022
Company Name:	Insource Co., Ltd.					Stock Exchange Listing: Tokyo
Code number:	6200	URL:	https://www.insource.co.jp/index.html
Representative:	Takayuki Funahashi, Representative Director, President and CEO
Contact:	Shigeo Fujimoto, Director, Executive Officer, and CFO		TEL. +81-3-5577-2283
Scheduled date to submit the Quarterly Securities Report: February 14, 2022
Scheduled date to commence dividend payments: ―
Availability of supplementary briefing material on quarterly results: Yes
Scheduled date of Quarterly Results Briefing Session: Not scheduled
							(Amounts are rounded down to the nearest million yen)
1. Q1 FY21 Consolidated Financial Results (October 1, 2021 - December 31, 2021)
(1) Consolidated Financial Results							(% indicates changes from the previous year)

		Net sales		Operating profit		Ordinary profit	Profit attributable to
				owners of parent


		mil yen		%	mil yen		%	mil yen	%	mil yen	%
Q1 FY21		2,192		20.8	775		20.0	765	16.1	522	15.5
Q1 FY20		1,814		11.7	646		56.1	659	58.9	452	63.7

(Note) Comprehensive income:	Q1 FY21	520 million yen (14.9%) Q1 FY20 453 million yen (63.7%)

	Earnings per share	Fully diluted earnings
	per share


		yen sen	yen sen
Q1 FY21		12.42	12.41
Q1 FY20		10.81	10.80

(Note) We conducted a stock split on January 1, 2021, whereby each share of common stock was split into two shares. In the above, "Earnings per share" and "Fully diluted earnings per share" are calculated on the assumption that the said stock split was conducted at the beginning of the previous consolidated fiscal year.

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

mil yen

Q1 FY21

6,460

4,368

67.6

FY20 Full-year

6,766

4,500

66.5

(Reference) Shareholders' equity:

Q1 FY21

4,368 million yen

FY20

4,500 million yen

2. Dividends

Annual cash dividends per share

End of Q1

End of Q2

End of Q3

Year-end

Annual

yen sen

FY20 Full-year

－

0.00

－

15.50

FY21 Full-year

－

FY21 (forecast)

0.00

－

17.00

(Note) Revisions of dividend forecast from recently announced figures: None

3. Consolidated Financial Forecast for FY21 (October 1, 2021 - September 30, 2022)

(% indicates changes from the previous year)

	Net sales	Operating profit	Ordinary profit	Profit attributable to	Earnings per share
							owners of parent
	mil yen	%	mil yen	%	mil yen	%	mil yen	%	yen sen
Q2 FY21 (Cumulative)	4,190	14.0	1,230	(2.2)	1,230	(3.4)	830	0.8	19.47
FY21 Full-year	8,900	18.6	2,600	8.1	2,600	7.6	1,770	12.7	41.53

(Note) Revisions of the forecast of financial results from recently announced figures: None

Notes
1. Significant changes in subsidiaries during Q1 FY21

(changes in specific subsidiaries involving changes in the scope of consolidation): None

Specific accounting methods for quarterly consolidated financial statements: Yes

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Notes to Quarterly Consolidated Financial Statements (Application of Special Accounting Methods for the Preparation of Quarterly Consolidated Financial Statements)" on page 7 of the attached materials.

Changes in accounting policies, estimates, and restatements

(i)	Changes in accounting policies due to the revision of accounting standards	: Yes
(ii)	Changes in accounting policies other than (3)-(i)	: None
(iii)	Changes in accounting estimates	: None
(iv)	Restatements	: None

Total number of issued shares (common stocks)
1. Total number of issued shares at the end of the period (including treasury stocks)
2. Total number of treasury stocks at the end of the period
3. Average number of shares during the period

Q1 FY21	42,621,500 shares	FY20	42,621,500 shares

Q1 FY21	530,311 shares	FY20	529,534 shares

Q1 FY21	42,090,063 shares	Q1 FY20	41,859,179 shares

(Note) We conducted a stock split on January 1, 2021, whereby each share of common stock was split into two shares, and the above calculations are based on the assumption that the stock split was conducted at the beginning of the previous consolidated fiscal year.

These quarterly consolidated financial results are outside the scope of an audit by certified public accountants and audit corporations.
Explanation for the appropriate use of financial forecasts and other special notes:

(Cautionary note on forward-looking statement)

The statements regarding the forecast of financial results in this report are based on the information that is available to the Company, as well as certain assumptions that are deemed to be reasonable by management, and they are not meant to be a commitment by the Company. Therefore, there might be cases in which actual results differ materially from forecast figures due to various factors. For details, please refer to "1. Qualitative Information on Quarterly Financial Results" on page 2 of the attached materials.

(How to obtain supplementary explanatory materials for financial results)

Supplementary briefing material on quarterly results is disclosed via TDnet on the same day.

Table of Contents

Qualitative Information on Quarterly Financial Results…………………………………………………………………….. 2
1. Overview of Business Results……………………………………………………………………………………………. 2
2. Overview of Financial Position…………………………………………………………………………………………... 3
3. Consolidated Financial Forecasts…………………………………………………………….…………………………... 3
Quarterly Consolidated Financial Statements and Notes…………………………………………………………………..... 4
1. Quarterly Consolidated Balance Sheets………………………………………………………………………………….. 4
2. Quarterly Consolidated Statements of Income and Comprehensive Income…………………………………………...... 5 Quarterly Consolidated Statements of Income
  Consolidated Period of Q1………………………………………………………………………...…………………... 5 Quarterly Consolidated Statements of Comprehensive Income
  Consolidated Period of Q1………………………………………………………………………...…………………... 6
3. Notes to Quarterly Consolidated Financial Statements…………………………………………………………………... 7 (Notes related to the Going Concern Assumption)……………………………………………………………………...... 7

(Notes to Significant Changes in the Amount of Shareholders' Equity)……………………………………………….....	7
(Application of Special Accounting Methods for the Preparation of Quarterly Consolidated Financial Statement)	7
(Additional Information) …………………………………………………………………………………………………	7
(Segment Information) ……………………………………………………………………………………………………	7
(Significant Subsequent Events) ………………………………………………………………………………………...	8

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1． Qualitative Information on Quarterly Financial Results

Description of Business Results

In the first quarter of the current fiscal year (October 1, 2021, to December 31, 2021), although the number of new COVID-19 infections continued to decline, the career training market is still undergoing a structural change in which organizations choose the best education method that suits their environment, such as online training and e-learning/videos, in addition to the traditional face-to-face training.

In response to this situation, the Group strengthened the development of training content that matches the needs of the corporate scale. Also, the Group enhanced non-face-to-face services such as online training, ‟Leaf"(HR support system, LMS (*1)), and e- learning/videos, as well as face-to-face trainings.

As for the On-Site Training business, the number of online training conducted in the private sector increased and the number of training conducted increased by 12.4% YoY, which reached a record high.

For Open Seminars business, although the impact of COVID-19 remained at beginning of the term, the number of attendees began to recover from November and the total number of attendees increased by 10.5% YoY.

About IT Services, the number of paid organizations for Leaf (HR supporting system, LMS) increased to 432 (+134, + 45% YoY). Total users exceed 1.84 million as of the end of December 2021, and Leaf`s monthly subscription fees (MRR(*2)) has increased steadily, with ARR(*3) increasing 53.9% YoY to 586 million yen.

In Other Businesses, the Web marketing business, which was introduced in the previous quarter, contributed to sales. Also, sales of new e-learning products with high unit prices increased.

As a result of the above, for the first quarter of the fiscal year, net sales is 2,192,609 thousand yen (+ 20.8% YoY), operating profit is 775,470 thousand yen (+ 20.0% YoY), ordinary profit is 765,713 thousand yen (+ 16.1%YoY), and profit attributable to owners of parent is 522,734 thousand yen (+ 15.5% YoY), and both net sales and profits reached record highs for the quarter.

*1:LMS (Learning Management System): A system necessary for implementing e-learning.

*2:MRR: Monthly Recurring Revenue

*3:ARR: Annual Recurring Revenue. Calculated by multiplying the MRR of the last month of each term by 12.

■ Net sales by business for	the first quarter of FY21		(Unit: thousand yen)
Business		Q1 FY21	YoY (%)	Q1 FY20
	(Oct. 1, 2021 - Dec. 31, 2021)	(Oct. 1, 2020 -Dec. 30, 2021)

On-Site Training		1,248,796	117.1	1,066,397
Open Seminars		507,230	113.5	447,008
IT Service		203,533	135.6	150,149
Other Businesses		233,048	154.5	150,860
Total		2,192,609	120.8	1,814,415

(Note)1. Since our Group has a single business segment, which is the education service business, the information herein is presented by business category instead of the segment.

2. Consumption tax is not included in the above amounts.

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Overview of Financial Position (Assets)
Total assets at the end of the first quarter of the current fiscal year decreased by 305,955 thousand yen compared to the end of the previous fiscal year to 6,460,749 thousand yen, mainly due to a decrease of 315,987 thousand yen in cash and deposits. (Liabilities)
Total liabilities decreased by 174,218 thousand yen compared to the end of the previous fiscal year to 2,092,061 thousand yen, mainly due to a decrease of 491,396 thousand yen in income taxes payable.
(Net Assets)
Net assets decreased by 131,736 thousand yen compared to the end of the previous fiscal year to 4,368,688 thousand yen. This was mainly due to a decrease of 129,690 thousand yen in retained earnings.
Consolidated Financial Forecasts

There is no change to the full-year consolidated financial forecast for FY21 from the forecast announced on November 4, 2021. The forecasts are based on information available at the time of preparation and actual results may differ from these forecasts due to various factors in the future.

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